Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKERin the Chair]

Oral Answers to Questions — WALES

Employment (Departmental Responsibilities)

Mr. Wigley: asked the Secretary of State for Wales how many additional civil servants, and what associated annual budgeted expenditure, came under his control following the transfer of responsibilities for employment to the Welsh Office.

The Secretary of State for Wales (Mr. John Morris): I have taken over responsibility for the activities of the Manpower Services Commission and the careers service in Wales. This involves 17 posts within the Welsh Office. Estimates for Welsh Office expenditure on the above services in Wales will be presented to Parliament in due course.

Mr. Wigley: Will the Secretary of State accept our best wishes for his tenure of responsibility over at least parts of employment in Wales and our hope that he may be more successful than previous regimes in London at overcoming the problems? Will he give an assurance that he will take a quantified approach, trying to identify how many jobs are needed in each part of Wales and using his employment brief, his industry brief and his responsibility for the Welsh Development Agency together? Further, will he consider bringing forward an economic plan for Wales aimed at overcoming the unemployment problems there?

Mr. Morris: I am grateful to the hon. Member for Caernarvon (Mr. Wigley) for his kind remarks, although I do not perhaps agree with him in respect of

his advocacy of an economic plan. At the meeting that I had with the Manpower Services Commission on 11th November, I said, following the tenor of the speech I made when I opened the jobcentre in Port Talbot in July, that I wanted an approach to be made, bringing together the various strands of responsibility that I hold, on a travel-to-work basis. It is my hope—and the Manpower Services Commission has agreed—to start with two pilot areas in North Wales in order to look at the industrial needs and at the employment and training needs. We shall seek to marry them, which I have the unique opportunity of doing because so many of these responsibilities are under one roof.

Mr. Ioan Evans: Does my right hon. and learned Friend agree that the problems of unemployment in Wales cannot be separated from the unemployment problems in the rest of Britain, and that if we are to solve them we must solve them in the whole of Britain? Does he agree also that there should be no further transfer of functions to the Welsh Office until we can obtain the decision of the people of Wales on their attitude to the Welsh Assembly?

Mr. Morris: I think that my hon. Friend is mistaken, in the sense that we are not devolving. We are decentralising certain functions, including economic functions, which we believe that it is essential to leave in the Welsh Office as part of the central approach of the United Kingdom Government. There is an opportunity here to bring together industry, which has worked so well since decentralisation—we have had substantial gains from this in Wales—my responsibility for manpower services and, in due course, further and higher education as well. I believe that here we have a unique opportunity of tackling, area by area, the problems of Wales.

Mr. Wyn Roberts: Is the right hon. and learned Gentleman aware that, according to a Written Answer given on Friday last, beween 1st March 1974 and 1st July 1977 the staff of the Welsh Office increased from 1,093 to 1,541, which is an increase of 41 per cent., compared with the general increase in the Civil Service of 6·1 per cent.? Can he assure the House that this increase is entirely accounted for by the increase in functions on the part of the Welsh Office?

Mr. Morris: One would have thought that the hon. Member would have welcomed the increase, since it is due to the transfer of functions. The Health Service transfer came, I believe, on 1st April 1974, industry came in July 1976, and there has been the transfer of a host of other, minor functions. Generally, the drive in the Welsh Office has been to economise on the number of civil servants in exactly the same way as in the central Departments of Whitehall. What we have done is to decentralise new functions on to the shoulders of the Welsh Office. I should have thought that there would have been a word of welcome for that from the hon. Member.

Rhyl

Sir A. Meyer: asked the Secretary of State for Wales when he next intends to visit Rhyl.

The Under-Secretary of State for Wales (Mr. Barry Jones): My right hon. and learned Friend has no immediate plans to do so.

Sir A. Meyer: I see from today's Order Paper that the Minister's right hon. and learned Friend has a good deal of travelling to do over the next period. When the Secretary of State comes to the Rhyl area, will he be surprised to find a place in which one in five is out of a job and a great many shops are empty, and a place which has now been hit by the consequences of severe flooding also affecting nearby Prestatyn? Is the Minister aware also of the feeling that his Department has rather lost interest in what happens in the area? We are excluded from the Welsh development area, and we have had no jobs under the dispersal of Government jobs scheme. Will the hon. Gentleman therefore encourage his right hon. and learned Friend to come, and to set party politics aside and listen to our grievances?

Mr. Barry Jones: Where the future and job prospects of any area in Wales are concerned, there are no politics whatsoever. I refute entirely the hon. Member's accusation that the Welsh Office has neglected that part of Wales. I appreciate the many problems that the hon. Member and his community face. I have heard of the problems from him many times in the House. But let me tell him

that special measures have so far created or saved just over 1,100 jobs in his constituency and that perhaps some 400 new manufacturing jobs are expected in the area from projects going ahead with the aid of selective financial assistance. The hon. Gentleman may know that the Welsh Development Agency is making direct investment in Western Electric Limited. Finally, with regard to development area status, the Welsh Office is well aware of the case made by the Clwyd County Council, but in the end the matter is the responsibility of my right hon. Friend the Secretary of State for Industry.

Sewerage Schemes (Expenditure)

Mr. Wyn Roberts: asked the Secretary of State for Wales what was the extent of capital underspending on sewerage schemes in Wales in the year ended 31st March 1977; and if he will make a statement.

The Under-Secretary of State for Wales (Mr. Alec Jones): District councils, as agents for the Welsh National Water Development Authority, spent £2·8 million out of an allocation of £7 8 million. Reasons for the shortfall are given in paragraph 8·4 of the Authority's annual report.

Mr. Roberts: Is the Minister aware that that shortfall amounts to 73 per cent. of the expected capital spending on sewerage? Is he further aware that there was a shortfall on the water supply schemes of 32 per cent. and an overall shortfall in WNWDA spending of 34 per cent.? Does he not think that this resulted in excessive borrowing on the part of the Authority and that it calls for an inquiry similar to the inquiry that he instigated on the shortfall in housing spending, which, we understand, is again this year running at about £15 million?

Mr. Alec Jones: Some of the reasons for the shortfall in this industry are spelt out in some detail in the report to which I have referred. I am very concerned if under-investment occurs, and officials in the Welsh Office are already having discussions about remedying the situation, but some of the problems associated with the shortfall in spending on water and sewerage services are a consequence of the types of organisation set up by the Opposition.

Mr. Wigley: Is the Minister aware that in the village of Deiniolen in my constituency people have been waiting for five years for sewerage plants to be installed and that after a five-year wait, when money was given as the reason for not going forward, the programme has finally been abandoned because there is not sufficient finance? Does not the Minister regard this as totally unsatisfactory? Can the Welsh Office become more involved to ensure that such a situation does not happen again?

Mr. Alec Jones: Individual schemes are a matter for the authorities themselves to decide. If the hon. Gentleman will write to me or come to see me on this case, I shall make further inquiries into it.

Carmarthen

Mr. Gwynfor Evans: asked the Secretary of State for Wales when he plans to visit Carmarthen.

Mr. Barry Jones: My right hon. and learned Friend has no immediate plans to do so officially.

Mr. Evans: When the Secretary of State does visit Carmarthen, will the hon. Gentleman ask him to call at County Hall, where he will learn that the slashing cuts in expenditure on roads, together with the £1 million and more interest which the people of Carmarthen, Cardigan and Llanelli, as well as Pembroke, have to pay on the cost of the Cleddau Bridge, will mean that, if this is persisted in, the principal roads in the county of Dyfed will be resurfaced once every 50 years, the non-principal roads once every 86 years and the thousands of miles of non-classified roads once every 289 years? Does he not consider that this will lead to an appalling situation on the roads which will mean no further or little further development in industry or in modern farming, which employs bulk tankers?

Mr. Barry Jones: I must disagree with the rather alarmist and exaggerated point of view expressed by the hon. Member. I do not agree that there have been slashing cuts in expenditure on roads in Wales. Indeed, the hon. Member's constituency will benefit hugely by the decision made by my right hon. and learned Friend to extend the M4 to Port Abraham. I would

also wish to tell him, if I had the time and had had notice of the question, that the Welsh Office will invest in many more road schemes pointing to West Wales.

Mr. Michael Roberts: Will the Minister ask the Secretary of State when next he visits Carmarthen to study the state of the people to find out whether they are free and to find out whether the county of my forefathers is still the land of the free? When he confirms the massive reality that the people of Carmarthen are still free and that they did not fight in vain for their freedom, does he then expect the hon. Member for Carmarthen (Mr. Evans) to stop talking nonsense about a lack of freedom in Wales?

Mr. Barry Jones: One thing I was not able to say to the hon. Member for Carmarthen (Mr. Evans) was that about 1,000 jobs in his constituency have been saved or created and that he has the perhaps enviable record of Welsh Members of Parliament that in his travel-to-work area of Carmarthen the rate of unemployment is the lowest in Wales.

Mr. Anderson: As my right hon. and learned Friend travels along the road to Carmarthen, will he travel along the M4, which he has saved against all the odds, thus helping the people of Carmarthen, and will he tap the views of the people of Carmarthen as to their priorities on whether they prefer expenditure to be on road signs or on roads?

Mr. Barry Jones: I would not wish the House to have the impression that money spent by the Welsh Office on roads entirely went to South Wales. I should like to point out to the hon. Members that some £150 million is soon to be earmarked for North Wales and the A55.

Steel Houses (Swansea)

Mr. Anderson: asked the Secretary of State for Wales whether he will consider financially assisting Swansea City Council in tackling the problem of corrosion in steel houses.

Mr. Alec Jones: Welsh Office officials are in touch with the council on this matter. No specific request for financial assistance has been received, but my right hon. and learned Friend would, of course, be prepared to examine any application.

Mr. Anderson: Does my hon. Friend accept that, because of its nature and scale, the problem of corrosion in Swansea merits special treatment beyond the normal allocation for repairs? If such an application were made, would he give a grant to Swansea over and above its normal repair allocation?

Mr. Alec Jones: The work which Swansea proposes to undertake is classified as repair and as such is normally financed either from the housing revenue account or, if borrowing is resorted to, from its main block allocation. We are prepared to increase that allocation.

Mr. Roderick: While my hon. Friend is thinking about housing costs, will he try to introduce a little more flexibility into the housing cost yardstick as applied to rural areas?

Mr. Speaker: Order. The hon. Gentleman is widening the Question until it covers the whole of Wales.

Local Authority Mortgages

Sir Raymond Gower: asked the Secretary of State for Wales what steps he will take to assist local authorities in Wales to increase mortgage advances.

Mr. Alec Jones: The allocations to Welsh authorities for lending in 1977–78 meet all the requests for allocations which have been made to my right hon. and learned Friend. If any other authority wishes to have an increased allocation, we shall be prepared to consider an application.

Sir R. Gower: I thank the Minister for that reply. Will he do his best to ensure that that fact is given the utmost publicity?

Mr. Alec Jones: I assure the hon. Gentleman that at recent meetings that I have had with representatives of every housing authority in Wales I have drawn attention to this fact and, as a result of applications made to me, have been able to transfer moneys from the main block into this lending block.

Mr. D. E. Thomas: The fact that the hon. Gentleman reduced and placed a moratorium on local authority lending last year has meant a far lower take-up of this mortgage facility than there would have been. Will he ensure that his

Department will impose no further moratoriums on local authority mortgages by telephone?

Mr. Alec Jones: One has to get this moratorium in perspective. The hon. Gentleman should be aware that it lasted exactly three weeks. In my view, a more likely reason for the low take-up was the high interest rates which prevailed during that period. I believe that the fact that interest rates have now fallen will be of some help, although I accept that local authority interest rates have not fallen as rapidly as building society rates.

Mr. Ioan Evans: Does my hon. Friend agree that, because of the Government's financial policies, the minimum lending rate has come down from 15 per cent. to 5 per cent., so that we can expect building society rates to come down again? Will he do his utmost to encourage building societies to play a greater part, and particularly to give advances for older property?

Mr. Alec Jones: Yes, Sir. We have done this in consultation with building societies. Following negotiations with them, we were able to announce on 1st April this year that the building societies were making an additional £8½ million available this year to purchasers nominated by local authorities.

Mr. Nicholas Edwards: The Minister is clearly aware that the interest rates charged by local authorities are often substantially higher than those charged by the building societies and have not come down anything like as fast, due to the present structure of local government finance and the requirements imposed on it by the Government. Will he undertake that the Government will look urgently at this problem so that local authority interest rates bear some relation to those charged on the commercial market outside?

Mr. Alec Jones: I am sure that the hon. Gentleman appreciates that the local authorities' real interest rate at present reflects the cost of their pooled borrowings. But the housing policy Green Paper proposes legislation, which we hope the House will pass, to enable authorities to charge mortgage interest rates equal to building society rates.

Rate Support Grant

Mr. D. E. Thomas: asked the Secretary of State for Wales what is the distribution of the rate support grant for 1977–78 for each county; and if he will indicate the gain or loss of resources to each county, as compared with 1976–77.

Mr. Alec Jones: I am circulating the information in theOfficial Report.

Mr. Thomas: Will the Minister confirm that there has been no reduction in the level of rate support grant resources being made available to the county of Clwyd, which covers part of my constituency and now has an unemployment rate of 12 per cent., the highest in Wales? Any reduction in rate support grant to this county would mean that the county was unable to undertake the short-term anti-unemployment measures now proposed.

Mr. Alec Jones: The rate support grant settlement has been looked at in totality for the coming year. We have examined its three elements. Under the domestic element, we have retained the differential of 36p in the pound in Wales as opposed to the 18½p in England. Without that, average domestic rate bills in Wales would have increased by 31 per cent. The resources element is of the same order. But there has been some marginal relative worsening in the needs element, though not in the actual cost, because all councils in Wales have increased the total even in the needs element.

Mr. Anderson: On the basis of this settlement, can my hon. Friend give an estimate of the average rate increase for Welsh ratepayers in the next year?

Mr. Alec Jones: On the basis of the settlement itself, it is not expected that rates in Wales or England need rise by more than single figures. But it is not only the settlement that will affect the level of individual rate bills. The level of those bills will be affected by policy decisions taken by the local authorities,

by the amounts of expenditure they will undertake and also by the extent to which they are prepared to draw on their balances.

Sir Raymond Gower: Is the Minister aware of fears expressed in some quarters that the Government's natural concern about the problems of the great metropolitan areas may induce them to overlook some of the peculiar difficulties of the widespread rural areas such as parts of Wales? Will he always keep this very much in mind?

Mr. Alec Jones: Yes, I certainly have such factors in mind. The rate support grant settlement is based on criteria by which we have attempted to discover those areas in England and Wales in the greatest need. All Members will appreciate that the regression analysis formula used may not be perfect, but it is an attempt to discover areas of genuine need and ensure that the rate support grant settlement meets those needs.

Mr. Nicholas Edwards: I appreciate the problems of the inner cities, but is it not a consequence of the Government's policy over last year and this that both Welsh local government, through the rate support grant, and regional policy have been impoverished? Is the Minister satisfied with the system of regression analysis? Can it be right that the industrial areas of South Wales and the rural areas of Wales, with their problems of declining population and unemployment, may lose resources to the inner centres and that their needs are less than those of the metropolitan areas?

Mr. Alec Jones: As I said earlier, one has to look at the totality of the matter and not concentrate on one aspect of it. At the end of the day, the settlement is designed to achieve a relative degree of stability in the coming year as opposed to this year. If the hon. Gentleman takes into account the fact that the total Exchequer support for local authority expenditure in Wales is about 75 per cent. whilst in England it is 61 per cent., I think that he will agree that we have made a reasonable and fair settlement.

Following is the information:


RATE SUPPORT GRANT: WALES


The total of rate support grant, including domestic, resources and needs elements, to each county area in Wales in 1976–77 and 1977–78 and the change between years, is shown below. For comparison purposes the figures shown are those resulting from the main Rate Support Grant Order for those years.


County Area
1976–77
1977–78
Absolute Difference (3–2)
Percentage Difference


1
2
3
4
5






£000
£000
£000
Per cent.


Clwyd
…
…
…
56,442
58,738
+2,296
+4·07


Dyfed
…
…
…
52,912
53,456
+544
+1·03


Gwent
…
…
…
68,082
72,569
+4,487
+6·59


Gwynedd
…
…
…
37,503
38,399
+896
+2·39


Mid Glamorgan
…
…
…
100,293
102,345
+2,052
+2·05


Powys
…
…
…
22,212
23,152
+940
+4·23


South Glamorgan
…
…
…
55,608
56,383
+775
+1·39


West Glamorgan
…
…
…
58,880
58,839
-41
-0·07


TOTAL
…
…
…
451,932
463,881
11,949
+2·64

Careers Service Officers

Mr. Roderick: asked the Secretary of State for Wales whether any decision has been made on the allocation of additional careers service officers' posts to assist in the implementation of new Manpower Services Commission measures for dealing with young unemployed people.

Mr. Barry Jones: Not yet, but I expect allocations to be made very soon.

Mr. Roderick: Does my hon. Friend recall that on a previous allocation of this kind no one was appointed within the county of Powys to undertake this work? Will he ensure that on this occasion special attention is paid to Powys with its special problems? Scarcity of population is a factor, as well as overall numbers of population.

Mr. Barry Jones: I recollect the fight that my hon. Friend put up last time, and I assure him that very sympathetic consideration will be given to the needs of Powys. I should be disappointed if Powys did not get one additional post.

Mr. Wigley: Is the hon. Gentleman satisfied that the new arrangement that is about to start, with an office in Wrexham and an office in Cardiff, will not fall between two stools? It does not give overall strategic control of the existing centre, but it is not sufficiently local to know the details of local schemes put forward. Will the hon. Gentleman look again at the proposed structure?

Mr. Barry Jones: I do not think that there is likely to be a change in the

structure. Extensive consultation took place. The areas must be large enough to sustain a full range of facilities. On the basis of the information that we have been given, there is every prospect of success.

Cardiff (Motorway Accessibility)

Mr. Michael Roberts: asked the Secretary of State for Wales what proposals he has to make the M4 more accessible to Cardiff.

Mr. Barry Jones: Proposals for a link between the motorway at Capel Lanilltern and the western side of Cardiff are now in the public participation stage and the statutory procedures will be completed as soon as possible.

Mr. Roberts: Can the hon. Gentleman give any example, from his experience of motorways in the United Kingdom, of any town or city comparable in size to the capital city of Wales that has the inferior proposals for access that Cardiff has? Will he do all he can to expedite the Capel Llanilltern interchange? Without it, the whole of the north of Cardiff will become congested and Cardiff will not be able to take the maximum economic advantage of its closeness to the M4.

Mr. Barry Jones: Certainly we shall make every attempt to speed up matters, but the interchanges are provided where they are needed and not on a rationed basis. We in the Department would argue that sufficient provision has been


made. As for proposals for an interchange at, say, Thornhill, I have to ask the hon. Gentleman whether he is sure that the residents of the Thornhill area would welcome it.

Mr. Cledwyn Hughes: Will my hon. Friend tell the House in due course what proposals he has to make Cardiff more accessible to North Wales?

Mr. Barry Jones: I had better say that I welcome that question and that the Welsh Office is determined that communications between North and South Wales by road and rail shall proceed apace. There is no doubt in my mind that before very long we shall make an announcement in this direction.

Sir Raymond Cower: When the Minister says that Cardiff is adequately supplied in this way, will he bear in mind that Newport, with a population of about 105,000, has several interchanges of this kind but Cardiff, with a population of twice as many—nearly 300,000—is reduced to one real interchange and one at St. Mellons, which is some distance away? Does not this on the face of it appear somewhat inconsistent?

Mr. Barry Jones: It is not inconsistent. I have no objection to other interchanges being built but would stipulate that there should be adequate connections to take the traffic.

Road Maintenance

Mr. Grist: asked the Secretary of State for Wales if he will give the expenditure by central and local government on road maintenance in each of the last two years and planned in the current year, expressed at constant prices.

Mr. Barry Jones: I will circulate the figures in theOfficial Report.

Mr. Grist: Does the Minister agree that the cut-back which has occurred in road maintenance has been extremely short-sighted, that it will lead to massively increased bills in the future, that it endangers road safety and that it has led county authorities to have to spend very much more on insurance premiums?

Mr. Barry Jones: In previous speeches, the hon. Gentleman has said that he wanted cuts in public expenditure. In reality, the situation has led to less money

being made available, and the hon. Gentleman is arguing against himself. Notwithstanding that, to indicate that I do not take lightly some of the complaints that he and others have made, I want to inform him of the widespread conditions survey of about 3,000–4,000 sites in Wales which will enable us to have effective monitoring of the situation.

Following are the figures:

For central Government—£7£7 million in 1975–76, £7·5 million in 1976–77 and £6·7 million in the current year.

For local Government—£35·1 million in 1975–76, £30·6 million in 1976–77 and £30·0 million in the current year.

All figures are at November 1976 prices.

Steel Industry

Mr. Nicholas Edwards: asked the Secretary of State for Wales what representations he has received about the financial position of the steel industry in Wales: and whether he is satisfied that the investment programme of the industry is making the expected contribution to economic progress in Wales.

Mr. Alec Jones: My right hon. and learned Friend has had several representations on various aspects of the steel industry in Wales. As the hon. Member knows, my right hon. Friend the Secretary of State for Industry is responsible for the steel industry. The British Steel Corporation's investment programme is one of the matters he is discussing with the Corporation and the TUC Steel Committee.

Mr. Edwards: Is the Minister aware that the West Wales Steel Development Committee is holding a crisis meeting today to consider the huge losses of BSC, the collapse of its investment strategy and the real possibility that the Port Talbot development will not go ahead? What action will the Government take to deal with this financial crisis and the potentially serious consequences for the Welsh economy?

Mr. Alec Jones: I have already indicated that this matter is principally one for my right hon. Friend the Secretary of State for Industry, but the investment to which the hon. Gentleman refers particularly is a matter for the Corporation within the financial limits and the strategic framework agreed with the Government. I very much hope that the obstacles to


a start on further investment can be overcome, but the situation is inevitably affected by market prospects.

Mr. Anderson: Does my hon. Friend accept that the elation in West Glamorgan when we had the announcement last February of the massive investment at Port Talbot is now being replaced by increasing worry that there will be an indefinite postponement? Does he accept the case that the Port Talbot investment rests mainly on the long-term future of British Steel as a whole and that it should not be held up because of short-term financial difficulties?

Mr. Alec Jones: I think that hon. Members on both sides of the House are concerned about the deterioration of the financial position of the British Steel Corporation, and it is this matter which now is the subject of urgent Government attention.

Sir A. Meyer: Is the Minister aware that, in a situation in which world demand for steel is contracting, the case for maintaining in production small and efficient producers is stronger than it ever was?

Mr. Alec Jones: Yes, Sir. There has been a suggestion that the Corporation might increase its investment in its small works. That, principally, is a matter for the Corporation in putting forward investment proposals which it believes to be sound. I welcome the hon. Gentleman's conversion to the interests of Shotton.

Mr. D. E. Thomas: Will the Minister ensure that the Government will resist in Wales any proposals for voluntary redundancies introduced by the Corporation, since alternative jobs have not been made available in steel-making areas such as Ebbw Vale and are not forthcoming in the other steel-making areas of Clwyd and South Glamorgan?

Mr. Alec Jones: I think everyone agrees that we need an efficient, high-productivity steel industry, and any question of de-manning is a matter for negotiation between the Corporation and the trade unions concerned.

Several Hon. Members: rose—

Mr. Speaker: Order. There are other Questions down about steel later on.

Industrial Development

Mr. Cledwyn Hughes: asked the Secretary of State for Wales if he will outline his plans for further industrial development in Wales.

Mr. Alec Jones: We expect the encouraging signs for the future of the United Kingdom economy to be reflected in the pace of industrial development in Wales. My right hon. and learned Friend will use to the full his powers to provide selective assistance under the Industry Act and, through the relevant agencies and other means, to further economic development and investment in Wales.

Mr. Hughes: I am much obliged to my hon. Friend. Will he confirm that the number of inquiries about industrial sites and factories in Wales is substantially on the increase? While I fully understand the absence of my right hon. and learned Friend from the Front Bench now, will my hon. Friend say on his behalf whether he felt that his visit to the Far East was a success and whether there is any substantial hope of further overseas investment in industry in Wales?

Mr. Alec Jones: I have discussed my right hon. and learned Friend's visit to Japan with him. He expressed the view that the organisations to which he spoke in Japan were interested in the United Kingdom, and particularly in Wales. Inquiries this year show an increase of 10 per cent. as against the comparable period last year, and visits, which are possibly a greater sign of interest, are up by some 20 per cent.

Mr. Wyn Roberts: But does not the Minister agree that the fall of more than six points in last quarter's industrial production index was quite appalling, and does he further agree that what needs to be done in Wales is to improve the prospects for small businesses on which we are particularly dependent for employment?

Mr. Alex Jones: We agree that small industries are very important for us in Wales, and that is why we believe that the concessions announced in the Chancellor's mini-Budget will be of help to us in Wales. That is why we believe that the extension of the small firms employment subsidy will be important to us in


Wales and why we welcome the Welsh Development Agency's intention to concentrate a large share of its new advance factory building programme on building smaller factories.

Mr. Gwynfor Evans: Is the Minister aware that it is the lack of a balanced industrial and economic development in Wales that has led to a critical employment problem over much of the last two generations? Is he further aware that if Wales had had her own Government during that time—that is, if Wales had national freedom, of which we have not a jot today—the situation in Wales would be comparable perhaps with that in Norway, Sweden, Austria, Luxembourg or other small countries where unemployment is negligible compared with our own?

Mr. Alec Jones: May I answer the hon. Gentleman by asking him this question? Is he aware that much of the investment which we need for Wales will have to come from outside Wales, including from parts of England? He would do more good for the people of Wales if, instead of attacking those who come in, he made some contribution to the efforts they are making. I remind the hon. Gentleman that I have heard him in this House attack the Government's policy of dispersing jobs to Wales.

Oral Answers to Questions — INDUSTRY

British Leyland and Chrysler

Mr. Hal Miller: asked the Secretary of State for Industry whether he will order a review of the implementation of the Ryder plan for British Leyland and of the Government agreement with Chrysler.

The Under-Secretary of State for Industry (Mr. Les Huckfield): British Leyland is preparing a corporate plan, on the basis of which the NEB will report to my right hon. Friend on future strategy for the company. The implementation of the agreement with Chrysler is kept under review by the monitoring arrangements my Department has with the company.

Mr. Miller: Does the Minister accept that there is widespread concern among the general public, which is contributing by taxation to these companies, and among all those who work there that the

original plans have now been overtaken by events? May we have an assurance that these revisions and reviews will be put to the House for discussion as a basis for further voting of public funds?

Mr. Huckfield: I should have thought that the best thing to do would be to let the new chairman, who has been in the job for only three weeks, get on with the job. I assure the hon. Member, as my right hon. Friend the Secretary of State has said, that the House will be kept informed of developments. I remind the hon. Gentleman that, as has been said before, the Ryder plan was a strategy; it was not a blueprint.

Mr. Norman Lamont: Following what the Minister has said about letting the new chairman of the company get on with the job, will the Minister assure the House that, whatever the TUC may decide about the 12-month rule on Wednesday, the Government will back the management in what it thinks is the appropriate reform of bargaining within the company?

Mr. Huckfield: I am sure the hon. Gentleman realises that the Government are still considering this matter and that obviously they will take into consideration what the TUC says.

Mr. Molloy: Will my hon. Friend tell the House what would have been the increase in unemployment in the motor car industry and in the motor car components industry if the measures which the Government have taken had not been taken? If, for example, we had accepted the policies of the Conservative Party and not implemented these proposals, is it not a fact that unemployment would have been considerably higher?

Mr. Huckfield: When the original rescue of the Leyland concern was proposed by the Government, it was noted that Leyland, indirectly and directly up and down the country, was probably responsible for about 1 million jobs. When Conservative Members criticise Leyland, I wish they would take that fact into account.

Planning Agreements

Mr. Rooker: asked the Secretary of State for Industry if he will make a further statement on progress towards planning agreements.

The Under-Secretary of State for Industry (Mr. Bob Cryer): I have repeatedly expressed my disappointment at the rate of progress being made in the implementation of planning agreement policy, which was announced early in the passage of the Industry Bill 1975 as being voluntary. The Government remain firmly committed to the concept of planning agreements.

Mr. Rooker: I thank my hon. Friend for that answer, but will he confirm that all the Ministers in his Department are in favour of planning agreements? Would he care to venture an opinion as to whether it is worth Back Benchers coming to this House repeatedly for Department of Industry Questions and seeking to get different answers from the one he has given today, since we are looking for something more positive?

Mr. Cryer: I am grateful to my hon. Friend for his comments. I can assure him that all the Ministers in the Department of Industry and the Government are in support of planning agreements. This has been Government policy. It was laid down in the election manifesto on which we were elected, and we have consistently maintained that planning agreements are important. I entirely accept that the progress so far has been extremely disappointing. In view of the massive amounts of aid to industry which this Government have been giving, both in grants and in tax concessions, it seems that industry could develop a more helpful and co-operative attitude towards planning agreements.

Oral Answers to Questions — CIVIL SERVICE

Computer Technology

Mr. Warren: asked the Minister for the Civil Service what major new uses of computer technology are being planned by his Department for the use of Her Majesty's Government.

The Minister of State, Civil Service Department (Mr. Charles R. Morris): Plans are at present at various stages of development for the use of computers by the Inland Revenue for the assessment of PAYE, the collection of both PAYE and Schedule D taxes, and the assessment and collection of corporation taxes; by the Department of Health

and Social Security in local offices to assist in the payment of short-term national insurance and supplementary benefits; by the Land Registry to extend its present computer system; and by the Employment Services Agency to extend its vacancy matching system. Several other Departments are planning to introduce a number of smaller systems for a wide variety of tasks making use where appropriate of recent developments in the technology.

Mr. Warren: While thanking the Minister for that remarkably full answer, may I ask him whether he has noticed that there seems to be a crusade against computers in many areas of the Civil Service? Will he try to get a move on with the introduction of computer services on a wider scale, and will he consult his colleagues in the Department of Industry to discover why that Department is so dilatory in promoting the development of computers which the Government could use?

Mr. Morris: I certainly do not accept that my ministerial colleagues in the Department of Industry are unmindful of the problems facing the computer industry in this country. I do not accept that the Civil Service or any individual civil servant is campaigning against the computer industry.

Dr. Bray: Will my hon. Friend bear in mind that a major revolution is going on in computer technology and that it is perfectly possible to make the prime consideration the quality of service provided to the public? Will he, therefore, make sure that there is the greatest possible access to and speed of response in the social services and the Inland Revenue to any approach that the public have to make to Government Departments?

Mr. Morris: I shall certainly consider that point.

Mrs. Bain: Can the Minister explain the delay in developing computer technology whereby the Schedule D assessments have not yet come to Cumbernauld new town?

Mr. Morris: That is a question for my right hon. Friend the Chancellor of the Exchequer.

Special Advisers

Mr. Gow: asked the Minister for the Civil Service what is the total number of Special Advisers to Ministers; and how many of those Special Advisers have been positively vetted for security purposes.

Mr. Charles R. Morris: There are currently 28 Special Advisers to Ministers and they have all been or, in the case of the most recent appointments, are in the process of being positively vetted.

Mr. Gow: Can the Minister tell the House why the number of Special Advisers has increased by three since 28th February this year? Is it because the Ministers have got worse and need more advice, or is it because the Special Advisers have become less good and we need more of them?

Mr. Morris: The hon. Gentleman's figures are wrong. In fact, there have been four new appointments and one resignation since the last list was published on 21st February.

Mr. Lipton: Has it occurred to my hon. Friend that many hon. Members are willing, at no extra expense, to give ample advice to Ministers at any hour of the day or night if they are in need thereof? Why do we have all these extra Special Advisers, who could easily be replaced by Members of this House?

Mr. Morris: I assure my hon. Friend that I recognise and welcome the advice which he gives me so frequently.

Mr. Rooker: May I ask my hon. Friend whether he will ask Ministers who have Special Advisers to review the advice that they have been receiving in view of the reports last week by Mr. Frank Field, who claimed that only one-third of the Cabinet were politically motivated anyway?

Mr. Morris: I certainly do not accept Mr. Field's views in that regard.

Pay

Mr. Canavan: asked the Minister for the Civil Service when he next expects to meet representatives of the trade unions in the Civil Service.

Mr. William Hamilton: asked the Minister for the Civil Service if he will

make a statement on the future of the Pay Research Unit.

Mr. John Garrett: asked the Minister for the Civil Service when he proposes to reinstitute the pay research system for determining Civil Service salaries.

Mrs. Bain: asked the Minister for the Civil Service what recent discussions he has had with the Civil Service unions.

Mr. Charles R. Morris: I met representatives of the Civil Service National Whitley Council with my right hon. Friends the Prime Minister and the Lord Privy Seal on Thursday 17th November, and I am pleased to announce that agreement has been reached between the Government and the National Staff Side for the immediate reactivation of the Civil Service Pay Research Unit to provide evidence for the settlement from 1st April 1979, subject, as in the past, to the provisions of any national pay policy.
A number of important changes to the pay research system have been agreed. In particular there will be a Pay Research Unit Board, with an independent chairman and members, to safeguard the independence and impartiality of the unit in all its work. The board will also be asked to investigate the problems of applying pay research to scientists and produce its own recommendations, which both the Official Side and the Institution of Professional Civil Servants agree in advance to accept, as to how pay research for scientists should be applied in 1980. I shall be placing a copy of the full text of the agreement in the Library of the House.

Mr. Canavan: I thank my hon. Friend for that comprehensive reply, but why are the Government refusing to restore normal collective bargaining to the Civil Service trade unions in time for the next wage settlement in April 1978 and making them wait until April 1979? Why is there this discrimination against the thousands of workers who make up the backbone of the Civil Service, while at the other end of the income scale there are people such as retired admirals and retired judges breaking the pay policy with pension increases, given this week, of more than 17 per cent., which in some cases amount to an increase of as much as £40 per week?

Mr. Morris: While I am grateful to my hon. Friend for the points he has made, I do not accept that the Government are discriminating in terms of pay against civil servants. Under the agreed timetable, a normal pay research exercise takes well over a year to complete, because it involves making detailed inquiries in a large number of separate firms. Taking that together with the time required to implement the improvement, we see our proposal of immediate reactivation, leading to a settlement in April 1979, as being reasonable. That is the first date by which a full survey is technically practicable.

Mr. Hamilton: Can my hon. Friend confirm that the staff side is entirely in agreement with the proposal that he has made? Will he also comment on the assertion that was made to me a week ago that some civil servants, as a result of the last two years of the pay policy, have lost one year's increase? Will he confirm or deny that?

Mr. Morris: The National Staff Side has understandable reservations about some of the features of the agreement that is now being entered into. The answer to my hon. Friend's second point, about whether civil servants have been discriminated against during phases 1 and 2 of the Government's pay policy, is that the very reverse is true. The criticism I usually receive is that this Government have been over-generous towards civil servants rather than the reverse.

Mr. Garrett: Will my hon. Friend understand that many of us welcome the proposal for a Pay Research Unit Board, which shows a very rapid response by his Department to some of the recommendations of the Expenditure Committee just a few months ago? Will he explain further what he means by the reinstitution of the pay research system from April 1979? Does that mean that until then civil servants will have to rely for any pay increases upon the cash limits?

Mr. Morris: No, that is not the position. Civil servants will receive a pay increase, with an operative date of 1st April 1978, which will be in conformity with the Government's guidelines in respect of pay.

Mrs. Bain: Are we to take it from his reply that the Minister does not accept

what the unions say—that a limited but adequate investigation could take place between now and 1978, thereby giving a reasonable settlement to the unions? Beyond that, can the Minister indicate whether the Pay Research Unit will be given any powers to investigate the implications of the London weighting allowance in terms of job dispersal?

Mr. Morris: The London weighting is outside the normal ambit of the Pay Research Unit's activities. But the hon. Lady is absolutely right—the individual Civil Service unions have reservations about the issue of the operative date of 1st April 1978. The idea of a limited Pay Research Unit exercise on the 1st April 1978 basis is wholly impracticable because of the teechnical arguments to which I have referred.

Mr. Hayhoe: Is the Minister aware that we welcome the agreement made between him, the Prime Minister and the National Staff Side and that we particularly welcome the introduction of an independent element into the board which will now be responsible for the Pay Research Unit?

Mr. Morris: I am grateful for the hon. Gentleman's comments and equally grateful for the co-operation shown by the National Staff Side of the Civil Service in this matter.

Mr. Wrigglesworth: Will not the Government think again about updating the figures that the Pay Research Unit has in time for the 1978 settlement? Would not this give a much more orderly situation for next year rather than the shambles of a situation in which many different claims are put in with no bench-mark against which to set them?

Mr. Morris: I well appreciate that my hon. Friend has a great deal of experience of the Civil Service. But I would emphasise to him and to civil servants generally that the Government never discriminate against civil servants on the question of pay and will not discriminate against them.

Oral Answers to Questions — HOUSE OF COMMONS

Refreshment Department (Wine Sales)

Mr. Critchley: asked the Lord President of the Council if he will take


steps to improve the labelling of bottles of wine sold by the Refreshment Department in order to describe more accurately their contents.

Dr. Reginald Bennett: I have been asked to reply.
Wines are sold as labelled on purchase. House wines must have an approved label, with information up to EEC standards.

Mr. Critchley: Is the Chairman of the Kitchen Committee aware that the bottle in question, for sale at £1·45, was labelled in large letters of gold "Fine Old Claret", that it was neither fine nor old and that I suspect it was not claret? Is he also aware that hon. Members on all sides of the House are extremely pleased that this kind of bottle has now been withdrawn from sale in the House?

Dr. Bennett: That label was one that, as it were, got through the net. It was rejected on arrival and the wine has now been re-labelled. I am sure my hon. Friend will be greatly relieved that it does not claim to be finer or older than one can usually get for £1·45, but it is, I can assure him, a Bordeauxappellation contrôlée. Indeed, I have here a copy of theacquit vert, the certificate of origin, in case my hon. Friend would like to inspect it. The wine is generally thought to be good enough, because we certainly had some great competition in selecting it.

Mr. Pavitt: Will the hon. Gentleman give information about the content and quantity for the benefit of those of us who buy wine, either red or white, by the carafe? In spite of what theSunday Times says, I do not know very much about wines—I usually drink red and not white. It would be very helpful to hon. Members if we knew what we were buying and just what the quantity was in a carafe.

Dr. Bennett: The carafe has hitherto been five-sixths of a bottle, but the EEC regulations have now somewhat changed that. A bottle is 70 centilitres. I believe that a carafe is 60 centilitres and a half-carafe 40 centilitres, which makes matters even more difficult, but I shall have this information printed on the wine lists

HOUSE OF LORDS

Mr. Skinner: asked the Lord President of the Council what representations he has received regarding the abolition of the House of Lords.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I have been left in no doubt that such a step would enjoy considerable support.

Mr. Skinner: Is my right hon. Friend aware that it is at this time in a Parliament's life that the House of Lords can be at its most dangerous, because its power to delay at the end of such a period is transformed into the ability to knock out any Bill it chooses, if the Government are getting towards the end of their period of office? Will my right hon. Friend therefore take full account of the massive majority at the Labour Party Conference and take no account of Lord Shinwell's remarks, especially when the noble Lord spent most of his time on the Aircraft and Shipbuilding Industries Bill voting with the Tories?

Mr. Foot: My hon. Friend is correct in the facts he recited at the end of his supplementary question. Of course, the vote at the Labour Party Conference was one of the representations to which I referred in my original reply.

Mr. Biffen: Has the right hon. Gentleman received or sought any views from the Liberal Party on the future of the House of Lords?

Mr. Foot: I have not actually discussed that matter with the Liberals, but I would imagine that some of them, at any rate, still hold to the old radical views that they held two or three decades ago.

Mr. William Hamilton: Would not my right hon. Friend think it highly desirable for the House of Lords to destroy the Scotland Bill, because he could then kill two birds with one stone?

Mr. Foot: I hope that there will not be any other invocations from hon. Members in this House to invite the House of Lords to exercise its powers in that way. I know that my hon. Friend the Member for Liverpool, Walton (Mr. Heifer) referred to the matter the other day, but he did it in a highly jocular


manner and people should understand that. Some people do not have as good a sense of humour as he has.

PARLIAMENTARY PROCEDURE

Mr. Canavan: asked the Lord President of the Council what reforms of the parliamentary system he intends to introduce in order to improve parliamentary democracy.

Mr. Foot: I would suggest that the House should await the outcome of the major review being undertaken by the Select Committee on Procedure.

Mr. Canavan: Does my right hon. Friend agree that one of the biggest threats to parliamentary democracy is when a Member uses a party organisation to get himself a safe seat in this place and then betrays his party and his constituency by crossing the Floor of the House? In such circumstances, should not a Member be obliged to do the decent thing and resign his seat so that people in places such as Newham, North-East can be properly represented in this House?

Mr. Foot: It is a matter of personal taste, but I think that right hon. and hon. Members who cross the Floor should certainly consider all the suggestions my hon. Friend has made. Indeed, I understand that the right hon. Gentleman the Member for Newham, North-East (Mr. Prentice) himself took that view some years ago when another hon. Member crossed the Floor in the opposite direction.

Mr. Dykes: Does not the Lord President agree that one of the important aspects of increasing the effectiveness of parliamentary democracy is by EEC scrutiny and to get really efficient, effective and constructive scrutiny in the future, which is even more important if and when direct elections take place? Does he not agree that intelligent use of the Committee upstairs which examines EEC instruments would be an important part of that improvement?

Mr. Foot: I think it is one of the ways in which scrutiny can be operated, but we will be discussing the whole of that question next Monday on a motion to be moved by my hon. Friend the Member

for Newham, South (Mr. Spearing) and we can examine all these matters more carefully then.

DEVOLUTION (REFERENDUMS)

Mr. Wigley: asked the Lord President of the Council whether he intends the separate referendums in Scotland and Wales, provided under the Scotland Bill and Wales Bill, respectively, to be undertaken on the same date.

The Minister of State, Privy Council Office (Mr. John Smith): Yes, that is our intention and the decisions which the House took last week should help us achieve it. But we shall need to keep the position under review in the light of progress on the two Bills.

Mr. Wigley: Is not the Minister aware, in view of the representations made last year for two separate Bills—because of the essential difference between Wales and Scotland and, indeed, the provisions of the two Bills, in that Scotland will have a legislative assembly and Wales will not—that there is every argument now for having referendums on separate days so that the two issues are not confused?

Mr. Smith: The most important matter which will determine the final attitude on that is the progress of the Bills, and we must wait and see what happens.

Mr. Anderson: Is my hon. Friend aware that many of us are striving hard to convince a sceptical electorate that the Government will not try to pull a fast one over the referendum? By such concessions and undertakings they are giving us many arguments to use.

Mr. Smith: My hon. Friend should listen to the answer which I gave: that that is our intention. If my hon. Friend repeatedly spreads false suggestions about the attitude of the Government, it is no wonder that some foolish people believe him.

Oral Answers to Questions — HOUSE OF COMMONS

Press Gallery

Mr. Spriggs: asked the Lord President of the Council what proportion of the costs of the Press Gallery of the House are paid for by newspaper and broadcasting organisations and journalists now using the facilities.

Mr. Foot: No charge is made for the accommodation provided for the Press Gallery.

Mr. Spriggs: I thank my right hon. Friend.

Oral Answers to Questions — THE HONOURABLE MEMBER FOR BOLSOVER

Mr. Speaker: Before the statement of the Secretary of State for the Home Department, I have a brief statement to make myself.
During the course of supplementary questions on last Thursday's business questions, the hon. Member for Bolsover (Mr. Skinner) made certain remarks which I did not completely hear, and, therefore, I did not immediately appreciate their full implication, though it was obvious to me that the hon. Member's remarks were not relevant to the following week's business, and I intervened to say so.
On reading theOfficial Report, however, it was clear to me that the hon. Member for Bolsover was making a serious imputation against the right hon. Member for Taunton (Mr. du Cann), for his words cannot be understood in any other sense than meaning that the right hon. Gentleman might not conduct himself as Chairman of the Public Accounts Committee with complete fairness and impartiality. This is a reflection on his integrity.
Had I realised the implication at the time, I would have ordered the hon. Member for Bolsover to withdraw his remarks forthwith. The time has unfortunately passed when I can do this, but I must make it plain that, in my view, they were entirely out of order. Allegations which reflect in any way upon the honour of any right hon. or hon. Member of this House should never be made in this casual way, and an imputation against a Chairman of one of our most senior Committees in respect of his conduct as Chairman cannot be allowed.

Mr. Skinner: It will not have gone unnoticed, Mr. Speaker, that what I had to say in the House on Thursday has not been challenged in any way, in as much that there is a need—

Mr. Speaker: Order. My statement is not open to debate. If the hon. Gentleman seeks to withdraw his statement he may do so. Otherwise my statement is not open to debate.

Mr. Skinner: I will seek to pursue the truth outside.

Mr. du Cann: Would it be of assistance to you, Mr. Speaker, and the House if I remarked on two matters? I was extremely sorry that the hon. Member for Bolsover (Mr. Skinner) was not in touch with me before he said what in fact he said in the House. We talk together. I have high regard for his parliamentary ability. I was in the House during the whole of the day in question, and at the moment that he made his remarks I was upstairs on Select Committee business. He could easily have been in touch with me, but I had no message.
The suggestion that there was in some way a loss to public funds owing to the activities of a company of which I had the honour for a time to be chairman is wholly and completely without foundation of any kind. It is true that the company in question had assistance from the support group organised by the Bank of England at one time. Interest was paid on the loans in question—

Mr. Heffer: On a point of order—

Mr. Speaker: Order. I have allowed the right hon. Gentleman, who was the person who suffered, to make a few explanatory remarks. He is in no way challenging anything that I have said this afternoon.

Mr. du Cann: As a result of that, there was a profit to public funds and the loans in question have been repaid in full and were repaid some time ago. If you will allow me to say so, Mr. Speaker, the hon. Gentleman's remarks were as unfortunate as they were deliberately designed to be misleading.

Mr. William Hamilton: On a point of order, Mr. Speaker. You made a ruling that your statement was not debatable, and the right hon. Member for Taunton (Mr. du Cann) has quite obviously ignored that ruling. It really is impossible that this is allowed to happen. The right hon. Gentleman gets away with it time and time again.

Mr. Speaker: Order. The hon. Gentleman is quite wrong. Statement, Mr. Secretary Rees.

Mr. English: On a point of order, Mr. Speaker. I understand that your statement—like any other by you—is not debatable. However, am I right in thinking that one may ask you questions about it? If so, could I ask you, Sir, whether, on reflection, you feel that some words that you used—in particular, when referring to impartiality—go a little far?
I should have thought that no Member of the House is impartial. The question is whether Members' partiality is caused by their political belief, by their background or by corruption. I do not think that my hon. Friend meant to imply corruption.

Mr. Speaker: Order. What was said in the House was that the right hon. Member for Taunton should not take the Chair because of certain reasons. Therefore, I put the interpretation on the statement which any ordinary person would.

Mr. Frank Allaun: May I ask you another question, Mr. Speaker? There are many cases in this House when there is no question of corruption but when there is a question of vested interest. For instance, if a man is a director of a company he is supposed—and he does not always do it—to declare his interest. I am not suggesting corruption, but surely I am right in asking you, Mr. Speaker, whether any Member of this House is not entitled to ask "Is a man with a vested interest fitted to do the job?"

Mr. Speaker: Order. We are getting very near to repeating the offence. Statement, Mr. Secretary Rees.

Mr. Tapsell: On a point of order, Mr. Speaker. In view of the terms of your statement, would it not be appropriate for you now to require the hon. Member for Bolsover (Mr. Skinner) to withdraw what he has said?

Mr. Speaker: Order. If the hon. Gentleman had listened with care, he would know the answer to that question. Statement, Mr. Secretary Rees.

Mr. Ridley: Further to the point of order, Mr. Speaker. The hon. Member for Bolsover (Mr. Skinner) has made certain allegations which have just been

categorically denied by my right hon. Friend. Is it not correct parliamentary procedure that the hon. Member for Bolsover should now apologise and withdraw his remarks? If he wishes to challenge anything that my right hon. Friend has said, he will have the opportunity to do so. However, in the absence of any denial of what has been said by my right hon. Friend—or of any challenge—such a course seems to me to be incumbent upon the hon. Gentleman, both in honour and in honesty.

Mr. Speaker: Order. The position has been made perfectly clear by me. Statement, Mr. Secretary Rees.

Oral Answers to Questions — FIRE SERVICE (DISPUTE)

The Secretary of State for the Home Department (Mr. Merlyn Rees): With permission, Mr. Speaker, I wish to make a statement about the Fire Service, in particular on the negotiations which have been taking place in the National Joint Council for Local Authorities' Fire Brigades on the claim submitted by the Fire Brigades Union for an increase of about 30 per cent., and on the operational response to the strike.
On 3rd November the employers' side of the National Joint Council made a three-part offer. This was: to increase pay by 10 per cent. from 7th November 1977; to continue discussions on the appropriate future position of firemen in the national pay structure; and to continue discussions on a reduction in the working week from the present 48 hours.
On 7th November a recalled delegate conference of the union rejected the recommendation of the executive council of the union that negotiations should continue within the framework of the employers' offer. At the same time a resolution was carried calling for strike action to begin on 14th November in the event of failure to settle the union's claim before that date. As the House will know, a national strike in the Fire Service began on 14th November.
Nevertheless, discussions have continued between the two sides of the NJC. On Friday 18th November the employers' side of the National Joint Council and the full executive of the Fire Brigades Union came to see me. I had separate talks with these two groups.


The employers had maintained their offer to implement immediately a pay increase of 10 per cent. This would have put some £5·50 to £6·60 into the firemen's pay packet immediately and would have increased the pay of the qualified fireman outside London from £65·65 a week to £72·29 a week and in London from £74·07 to £80·67 a week.
Progress was made on the longer-term issues. The employers were ready to agree in principle to a reduction of hours from November next year. There were useful discussions on a formula for determining fire service pay in the future. I understand that the employers would have been prepared to reach agreement on a pay formula if the Fire Brigades Union for its part would undertake to put it to a further recalled conference, recommending its acceptance and also a return to normal working.
The Fire Brigades Union rejected this. Members of the executive made it clear to me that what they wanted was a more substantial pay increase immediately.
Talks will continue between the two sides on the longer-term issues of a reduction in hours and a pay formula, but there is no present basis on which the union would be prepared to recall its conference and seek an end to the strike.
I have been in touch with the secretaries of the National Joint Council to clarify the situation. The Secretary of State for Scotland and I are available at any time to see the two sides of the National Joint Council.
As to the operational response, the steps which we have been taking with fire authorities and with the Services to provide a fire-fighting force have been under constant review during the past week and we have taken steps, as necessary, to increase our capability. Further Service men have been made available, and so have further emergency appliances.
We have looked very carefully at all aspects of the use by Service men of breathing apparatus and other equipment ordinarily used by regular firemen. Her Majesty's Chief Inspector of Fire Services and the Service authorities have confirmed their original advice that it would be unsafe for inexperienced Service men with only minimal training in

fire-fighting as a whole to be issued with breathing apparatus. Fire-fighting is a skilled and complex operation. It is not simply a matter of a Service man learning to wear a mask. It is necessary to be fully trained in the fire-fighting techniques made possible by the use of breathing apparatus, and in the safety procedures to be followed, if men are not to be put at grave risk. The great majority of Service men now carrying out fire duties are not trained at all in this way.
But we have now deployed 132 trained RAF fire-fighters who are competent in the use of breathing apparatus. A further 30 are in reserve, and 60 trained men are also being made available by the Royal Navy.
With regard to the other equipment in fire stations, essentially what we are concerned with here is the red appliances, the water tenders and pumps, hydraulic platforms, turntable ladders and pump escapes. The advice given me by Her Majesty's Chief Inspector of Fire Services is that some of these appliances—the hydraulic platforms, turntable ladders and pump escapes—could not be used safely by troops without extensive training. The pumping appliances, water tenders and pumps do not present the same safety problems, but they are a good deal more sophisticated than the Green Goddesses which the Service men are now using, and there are difficulties, even for trained firemen, in switching from one make and type of pumping appliance to another.
The only equipment in fire stations for which there might conceivably be need and which could be used by troops is foam-making equipment. This is required only in fighting certain types of fire, for example, oil fires. In fact, foam compound is available from the RAF and has been made available to the Service men, in addition to other foam-making units. All this foam may be used in conjunction with the Green Goddesses.
Finally, I repeat that the Secretary of State for Scotland and I remain ready to see the two sides of the National Joint Council if it appears that we can help in any way to bring this dispute to an end, and so enable firemen to have the benefit of the immediate pay offer which has been made to them and of the longer-term improvements which can come to the service.

Mr. Whitelaw: The right hon. Gentleman said that the employers are ready to agree in principle to a reduction in hours from November next year. If the principle of a reduction in hours is conceded, would there not be a basis for negotiation leading to a settlement on the timing of any such changes?
We appreciate the problems of Service personnel using complicated equipment. May I ask what steps the right hon. Gentleman is taking to give the troops the necessary training? Does he appreciate that we welcome the RAF fire-fighting services that have now been brought into operation, although I think we must say that it is a pity that they were not brought in at the very first instance? There may, however, be reasons for that.
Further, will the right hon. Gentleman look into exactly what equipment was used by the Forces in the Glasgow fire problems in 1973? Finally, will he undertake to ensure that whatever equipment can safely be used is made available, including—and I understand that this is not universally allowed—plastic helmets for the troops? Can these be made available whenever they can be used, for the protection of the troops and as a help in fighting fires on behalf of the public?

Mr. Rees: The right hon. Gentleman is right that the big change in these negotiations is the reduction in hours from 48 to 42, which I put to the NJC at the beginning. It is something that the union has been concerned about for many years, not just in the context of a reduction of hours but in terms of a more efficient use of Fire Service personnel. I believe that it is a basis on which we can talk within the guidelines of the pay policy.
I want to make one point clear about equipment, namely, that the fact of the RAF personnel going in did not take place as a result of any discussions in the House. It was a result of what was put to me by my technical advisers in the course of last week.
Turning to the issue of training, it should be realised that it is not just a matter of training someone in the use of equipment. What matters—and this is reflected in the pay and rank structure of a fire brigade—is the use that is made

of that equipment in a fire situation. It is an extremely complicated matter, as anyone will know who has visited Moreton-in-Marsh to see the nature of the training that takes place there. It is not training simply in the narrow use of equipment. It is training in the wider use of such equipment in a complicated fire, under the leadership of officers and leading firemen who are trained fully in the art.
I am absolutely convinced—and I am reinforced in this conviction by the advice given me—that it would be extremely foolish, on the basis of the training alone, to put the Service men in a dangerous and difficult situation in a complicated fire incident.
As for the point made about Glasgow, I will look at that suggestion—

Mr. Prior: The Secretary of State should do more than look at it.

Mr. Rees: May I say to the right hon. Member for Lowestoft (Mr. Prior) that the question of what happened in Glasgow may be important, but it is not of fundamental importance in the wide discussions that have been taking place in recent weeks. In the context of industrial disputes the right hon. Gentleman is the last man, given what he has done in industry in the past, to talk in that way.

Mrs. Castle: Can there be any hope of the industrial action being concluded until a formula for firemen's future pay has been firmly agreed between the two sides and accepted by the Government, subject to the same sort of phasing as is to apply to the police? Is it not that on which we should be concentrating?

Mr. Rees: In the earlier stages I thought that there was something in my right hon. Friend's initial suggestion. As for the phasing, if my right hon. Friend will consider what I said earlier, I am advised that agreement could be reached on that relatively quickly. If that were to happen the view of the Government about when it could be implemented and phased would be relevant. At this pitch, as much as a week or so ago, I thought that there was something in the idea. There has to be agreement in the NJC. It did not come about, but that is where the negotiations take place. I do not believe that the issue of reaching a


formula is holding up an ending of the strike.

Mr. Pardoe: Will the Home Secretary accept that most right hon. and hon. Members would wish to thank and congratulate the troops and Royal Air Force personnel on the remarkable job which they are doing, at substantially lower rates of pay than would be paid to the firemen, even under the existing arrangements?
Does the Home Secretary accept that discussion about the future position of firemen in the national pay scale is a matter not for collective bargaining but for a fully formulated pay policy. Does he agree that it is a great pity that we do not still have the National Board for Prices and Incomes to sort out this kind of problem?
Does the right hon. Gentleman further accept that those of us who represent low-income areas do not regard the offer of £72.29 for a fireman outside London as derisory?

Mr. Rees: On the question of the relative pay of the low-paid in all parts of the country, there is no doubt that, when one looks at the structure of the pay of the firemen, a 10 per cent. pay offer is not a bad offer compared with offers in the past. Also involved, however—and this is part of the intricacies of emotion involved—are the discussions that have taken place over the past eight years about the future of the Fire Service, its greater use in fire precautions, higher status for the firemen, and matters of that kind, which I believe are important, and, I agree, are related to the reduction to a 42-hour week. There is far more to it than that, but I accept fully that the matter of the pay that is being offered and the pay figures that have now been published put the pay position of the firemen in a different perspective.

Mr. Heffer: As some people in private industry, such as white-collar Ford workers, are now voting to accept 12 per cent., does my right hon. Friend not accept that firemen look at this situation and feel very aggrieved as a result? Is it not quite clear that, if there is to be a settlement, it is a question not just of reduction of working hours in the future but of putting more on the table now? Is my right hon.

Friend also aware that the Government are losing public support on this question, that the public are backing the firemen, and that, whether he or anybody else likes it, sooner or later they have to get round the table and offer more in order to get a settlement?

Mr. Rees: My hon. Friend talks about 12 per cent.—and I suppose that nobody would pretend, despite the way it is being put, that the 30 per cent. is absolutely inviolate. But nothing that I have learned in my discussions leads me to think that, even if it were possible, anything like 12 per cent. would be acceptable to the firemen. They are talking about a good deal more, and that would drive a coach and horses through the pay policy. That is something that the Government must protect. It is of the greatest importance that there is a flexibility here and, like my hon. Friend, I think that talking round the table is the way to achieve it.

Sir John Hall: While I have considerable sympathy for the firemen's case, is the Secretary of State aware that in the High Wycombe station there are some 12 members of the British Fire Service Federation who have remained on duty to give a vital service to a high-risk town? Is the right hon. Gentleman further aware that in consequence they have been subjected to vicious abuse and some violence by so-called pickets brought in from outside the area? They have also been threatened that, if and when the strike is settled, they will lose their jobs. Will the Home Secretary point out to the Fire Brigades Union that such tactics do its cause no good at all?

Mr. Rees: I have known the FBU for a long time, and I have no doubt that the viciousness and other things that are going on in different parts of the country do not have its support. There always are problems with picketing, and one has to wait and see how the matter is resolved and what happens in the longer run. But I make it absolutely clear that this sort of behaviour and abuse—some of it turned on the wives of officers, and so on—does not have the support of the FBU, whose service in the wider trade union movement over the years and the work that it has done mark it out as one of the most important and best unions that I have ever had anything to do with.

Dr. M. S. Miller: Is my right hon. Friend not aware that there is considerable disappointment in his statement this afternoon in that the two sides are just as wide apart as ever? Should he not forget protocol in this case and take an initiative himself in order to try to arrive at a solution based on what he has said this afternoon, in respect, for example, of the overtime payments over and above the 42-hour week? Will he also take on board the possibility that there could be other payments made to firemen which would not break the Government's guidelines—in rent allowances, for example? Would he take these on board, and will the Government try to take an initiative of their own, otherwise the situation will become even more dangerous.

Mr. Rees: I met separately the Secretaries of the NJC this morning to—and I use the correct word—clarify the situation.
My hon. Friend spoke about my responsibilities. I am not unaware of them. But the question of overtime has been thrown into the discussion, and I noticed over the weekend that people were talking about it as if it were new. In fact, there is overtime which is subsumed into the 48-hour week. I leave the matter at that.
I understand that it was trade union policy some years ago to end rent allowance. That, too, was subsumed in the payment. By the nature of the Fire Service—as the hon. Member for Essex, South-East (Sir B. Braine), whom I see opposite me and who is involved in the Fire Service, will know—this is a most complicated matter. These matters are best discussed round the table, and that is my aim, because at the end of the day that will be the way in which this dispute will be settled.

Mr. Bowden: Is the Home Secretary aware that at the Fire Services Training College at Moreton-in-Marsh in Gloucestershire there are considerable quantities of equipment—simple, straightforward equipment—which could be used by the troops? Will he consider making these available to the Armed Forces where their units are engaged in fire-fighting activities? Further, is he aware that I believe that the House as a whole and the country will be disgusted at the comments he made about my right hon.

Friend the Member for Lowestoft (Mr. Prior)? If my right hon. Friend had been in charge, this situation would never have arisen.

Mr. Rees: With that last remark we moved from a serious discussion of the matter into romancing and the novel. With regard to the equipment at Moreton, I am advised by my advisers that, given the use of Service men, the equipment that is provided is suitable for the job. We are not seeking to do the job—and it could not be done—that is done by the firemen when working normally.

Mr. Ashton: Is my right hon. Friend aware that the Government are now trying to run a voluntary incomes policy without any volunteers? To make it even worse, there is no referee to sort out the good cases from the bad.

Mr. Pardoe: Whose fault is that?

Mr. Ashton: I am not in favour of statutory policies either.
Is my right hon. Friend aware that trade unionists in other unions up and down the country would not be averse to the firemen's union receiving overtime pay for the difference between the 40 hours and the 48 hours that they work, and would not take this as a precedent?

Mr. Rees: I note what my hon. Friend says about incomes policy. The present position is that in the last eight hours of work there is premium pay at time and one-third, which is overtime which is already paid. It is possible to argue whether it should be paid at a higher rate. But I would say that if that were possible in pay policy it would produce a very small sum of money.

Sir Bernard Braine: Is the Home Secretary aware that there are certain situations in which troops and volunteers, with the best will in the world, could not possibly cope in the event of serious fire? In particular, there are hospitals and old people's homes where the inmates are particularly vulnerable and cannot be moved quickly, and whole communities, such as Canvey Island, that have to live close to excessive concentrations of gas, chemical and oil storage and are dependent entirely upon a highly professional Fire Service? Would it not be possible in these circumstances for the Home Secretary to appeal to the Fire Brigades


Union to deal with these situations exceptionally without prejudice to their cause?

Mr. Rees: As I think the hon. Gentleman knows, because he is an adviser to one of the Fire Service organisations, given the present mood I do not think that the appeal would matter. I have noticed that, with few exceptions, when there is something serious the strikers remember that they are firemen and what they have been trained to do. I think that we can leave that matter to that aspect.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call two more Members from each side. There are two short debates today.

Mr. Clemitson: Will my right hon. Friend take this opportunity of refuting some statements made on the "World at One" programme today by the leader of the employers' side on the National Joint Council, who said that firemen are now pawns in a political game and that the control of the strike had passed into the hands of the International Socialists? Will not the Home Secretary agree that such statements are hardly conducive to the settlement of this dispute?

Mr. Rees: I did not hear that. I understand that in some parts of the country there is an influence in that respect, but the idea that the Fire Brigades Union is run by an outside body is not true.

Mr. Henderson: Will not the Home Secretary consider that the area for movement in this matter is the recognition that hours ought to be reduced from November next year, which will require the employment of a large amount of additional manpower? Looking at the terminology of the Government's pay policy, could he not find it possible to accept the argument that the firemen are working some 14¼ per cent. additional hours at present and that this surely is productivity in anyone's language?

Mr. Rees: All these matters are being considered. A number of things also have to be taken into account. The hon. Gentleman has obviously studied the matter. The feasibility study on hours of work shows that in one brigade at one extreme, out of 48 hours, 32 hours are on standby, whereas in another brigade it is as low

as eight hours. There are reasons for this. All this material together certainly needs to be studied. My aim is to bring people together to talk.

Mr. Flannery: Does my right hon. Friend agree that to talk about the 31 per cent. as though it were rigid would be wrong and that it is a negotiating figure which should allow a great deal of flexibility on both the employers' and the workers' side? Does he also agree that, even after a 10 per cent. increase, this group of, to use his own words, "highly skilled workers" would still be receiving many pounds below the national male average? Therefore, could he not, possibly through overtime, which brings firemen nowhere near the national average wage, find some method of flexibility in order to give them something more?

Mr. Rees: Because of the overall situation, this is the difficulty about making comparisons in special cases. But I ask my hon. Friend to look at the figures published inHansard on Friday last, because the way that he is putting it—by saying "many pounds", and so on—is not the fact of the matter. I understand the short-term situation, but what matters in the long term are the hours and the bench-mark for the pay of firemen in future, in the context of the new style of fireman who works even when there are no fires and operates principally in the field of fire precautions.

Mr. Goodhart: Is the Home Secretary aware that in recent days I have seen some Army fire-fighters living in conditions that can only be described as squalid? If this strike is to be protracted, surely these sub-standard conditions must be put right immediately or the strain on the Army fire-fighters will be intense. Is he also aware that there appears to be some confusion about the charges for food and accommodation made on the Army personnel who are fighting fires? Surely during this emergency no Service fire-fighters should be required to pay a penny for their keep or accommodation.

Mr. Rees: I shall certainly take that up with my right hon. Friend. The matter that the hon. Gentleman has raised is important. The number of soldiers has been increased. With regard to strain, it is possible to reduce the number of hours during which these men have


to go to fires or are on duty. I am told that the mood of the Service men certainly does not lead anyone to talk about strain, but I shall bring these points to the appropriate quarter.

Mr. Whitelaw: May I return to one point about the use of equipment? The right hon. Gentleman has said that some equipment can safely be used by the Service men. I should like to add one that I believe is right. I understand that in some areas plastic firemen's helmets are being allowed for use by the troops; in other areas they are not. Surely this is a device which can safely be used for the protection of the troops in their work. In these circumstances, will the right hon. Gentleman undertake simply to answer one question? Will he ensure that whatever equipment can safely be used for the protection of the troops, and, indeed, for the benefit of the public, will be made available to the troops?

Mr. Rees: I had a long meeting on this matter last week and another, lasting many hours, yesterday, and the answer which I gave is a considered one and taken fully on advice. Given the situation and the needs, I am sure it is being done in the right way. I will certainly consider the question of the use of plastic helmets. I was advised on one point in connection with protective clothing: in one instance I queried why men were not wearing it and I was told that the men and their officers preferred—given the nature of the fires, not right inside the building—not to wear it. I do not know whether that point has a bearing on the use of plastic helmets, but I will consider the matter.

Mr. Bowden: On a point of order, Mr. Speaker. I submitted an application for Standing Order No. 9.

Mr. Speaker: I thought that in view of the exchanges the hon. Gentleman was not pursuing it.

Mr. Bowden: I was going to say, Mr. Speaker, as you have just told the House, that I had asked permission to seek the leave of the House under Standing Order No. 9 to discuss the supply of fire-fighting equipment for the Armed Forces. In view of what the Home Secretary has said, I should at this point like to withdraw the application but reserve my right to submit it at some future time.

Mr. Speaker: That is a new formula to me.

Mr. Mates: On a point of order, Mr. Speaker. I am sure that in such a serious situation the Home Secretary would not wish in any way to mislead the House as to the state of affairs as regards equipment being issued to the Services. I am not trying to use a point of order to get round the fact that I could not put a supplementary question. I was in Belfast last night and I was present at a fire. The troops were not issued with the equipment. They wanted to be issued with the equipment. It has happened in some parts of the country and not in others.

Mr. Speaker: Order. May I suggest to the hon. Gentleman that there are means open, both with his own Front Bench and with the Secretary of State, for him to pursue that information.

Mr. Rees: Further to that point of order, Mr. Speaker. Because the Belfast and Northern Ireland situation is even more difficult, given the background, I wonder whether I should be in order if I said, without knowing the background to the matter—my right hon. Friend the Secretary of State for Northern Ireland is responsible there—that I shall bring it to his notice. I should not like that matter to fester because the point has not been answered in the House.

Orders of the Day — SUPPLY

[1ST ALLOTTED DAY],—considered

Orders of the Day — INDUSTRIAL TRIBUNALS

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Ann Taylor.]

4.8 p.m.

Mr. Barney Hayhoe: Industrial tribunals, which are the subject for the first half of this first Supply Day, have been a feature of the national industrial relations scene for some 12 years, though their work is now vastly increased compared with what it was when they were created in 1965 to deal with disputes and questions arising out of the Conservative Government's Industrial Training Act 1964. They have been given very many additional responsibilities over the years by the Redundancy Payments Act 1965, the Equal Pay Act 1970, the Contracts of Employment Act 1972, the Trade Union and Labour Relations Act 1974, the Health and Safety at Work Act 1974 and the Sex Discrimination Act 1975. Perhaps the heaviest load arises out of the provisions of the Employment Protection Act 1975.
A substantial area of their work is concerned with unfair dismissals. This arose first out of the Industrial Relations Act 1971, the Conservative Government Act which first gave people a statutory right to complain and seek redress if they felt that they had been unfairly dismissed. That right was extended and modified by the Trade Union and Labour Relations Act 1974, which, though it repealed the 1971 Act, in fact re-enacted and extended these provisions, and also by the Employment Protection Act.
As jurisdiction has widened and the case load has been much increased, so public concern has become greater. This debate is an expression of that concern. I hope that it will consist largely of constructive criticism of the many aspects of the work of the industrial tribunals and also of the composition of these tribunals, but before turning to some of the detailed points I want to make, I shall

refer to quite extraordinary comments by the Secretary of State for Employment when he spoke to the National Chamber of Trade on 2nd November, only a fortnight or so ago.
In that speech, after giving figures about the number of unfair dismissal claims—he indicated that they had gone up from 5,000 in 1972 to 39,000 for the 12 months ending 30th June 1977, representing an eight-fold increase in less than five years—the right hon. Gentleman talked of compensation awards of £1,000 and over in these terms:
There are very few cases where that can happen, usually where a rare jackpot of circumstances have come up on the industrial relations fruit machine.
It really is a remarkably insensitive if not offensive suggestion to compare industrial tribunals with having a go on a fruit machine.
If such a comment had been made by the right hon. Gentleman's predecessor, now the Lord President of the Council—well-known for the extravagance of his language—perhaps it would not have mattered. If such a comment had been made by the Under-Secretary of State for Employment, the hon. Member for Newcastle-under-Lyme (Mr. Golding), whose speech sometimes tumbles rather ahead of his thoughts, we should not have thought too much of it. But when the Secretary of State, who is known and rightly known for the dullness of his language, uses such phraseology, it is surely highly significant. It confirms the worst suspicions of those who see many unfair dismissal claims as capricious and made on the basis that the claimant has nothing to lose and perhaps something to gain.
So, to use the Secretary of State's own simile, on the industrial relations fruit machine the difference from real life is that the person operating it does not have to put in any money. He does not have to risk anything, because payments and jackpots are available sometimes with no, or very little, risk to the person so going to the tribunal.
I turn now to the composition of the tribunals. The latest figures show that there are about 2,300 lay members. A tribunal has a legally qualified chairman and two lay members drawn from a panel nominated on the advice of employers'


organisations and another panel nominated on the advice of employees' organisations. For employees, however, only one such organisation is concerned, and that is the TUC. The employers' panel contains about 22½ per cent. women and the employees' panel just under 20 per cent. women at the moment.
But there is concern about two issues. First, this Government have given the TUC a total monopoly of nomination rights for the employee representatives, which is blatant discrimination against the non-TUC unions. On a number of occasions my hon. Friends have asked Questions about this. I recall some exchanges at Question Time with the Minister of State on 16th November 1976. We were given very unsatisfactory replies by him.
First, the Minister of State argued that, really, since a somewhat similar situation had existed between 1965 and 1971, there was no need to change it. Then he argued that, since the TUC accounted for 90 per cent. of people in unions, it was perfectly proper that the TUC should have the monopoly. What about the 10 per cent.? If there are about 1,000 nominees, 10 per cent. is a sizeable fraction. One could expect the Government to go to other employee organisations, which are not affiliated to the TUC, to ask them for nominations for about 100 of the places available.
The third reference made by the Minister of State in rebutting these proposals was that the Government wanted people who understood the problems of ordinary working people. That is a gross affront to those in non-TUC affiliated unions who perfectly understand the views of ordinary working people. They are no less able to articulate those views than are members of TUC-affiliated unions.
I ask the Government to look again at this question and to see whether they could not break that monopoly of the TUC on the nomination of employee members of the panel. It seems to us that a very strong case has been made for going wider. I do not only refer to the case that we have deployed in the House, but to the powerful reinforcement for our views that has come from the Council on Tribunals, certainly a prestigious body.
In its annual report for 1975–76, which was laid before the House earlier this

year and printed in March, the Council says that it has said to the Department:
consultation on employed persons should not be restricted to the Trades Union Congress. These representations have not been successful.
This is not a party point which is being made just from one side of the House. This proposal has the support of the Council on Tribunals and it is not good enough for the Government to refuse to respond to these pressures and to broaden the membership of the employee side of the panels for people to serve on industrial tribunals.
The employers' side goes wider than the CBI and it is right that it should do so. It extends nomination rights to a number of other organisations, and as a result there is a wider and more balanced representation.
There is no possible justification for setting aside these weighty recommendations. I can only hope that what might be described as the mean-minded partisan political prejudice which must have been animating Ministers will be set on one side and the TUC monopoly broken.
The second issue on the composition of the tribunals concerns the under-representation of women. I have referred to that by giving the percentages. Under 20 per cent. of the employee members of the panel, on the last figures I say, were women, as against 22½ per cent. for the employers. Yet women represent 40 per cent. of the working population.
This must be looked at again. It is particularly important in the sense that when the terms of service of some women members of tribunals who have not been nominated from TUC sources came to an end, a number of them—over 40 women—found that they would not be reappointed because they did not carry the label of being nominated by the TUC. As a result, there is an even greater imbalance in the membership of the tribunals.
There has been some criticism of the way in which members are selected from the panels to serve on the tribunals. It is important that clear rules and criteria are established. Equally, as the complexities of the work carried out by industrial tribunals increase—and the list of the relevant Acts with which they have to be concerned indicates something of the great complexities that exist—a case can


be made for more formal training of the lay members. I think that some training is given in certain parts of the country. But I hope that the Secretary of State will consider the possibility of wider training for the lay members, and also ways in which they can be kept up to date with the new information constantly coming forward as a result of appeals either to the Employment Appeal Tribunal, or to higher courts.
I turn now to the work of the tribunals. One knows that there is concern about equal pay cases. The Equal Opportunities Commission has been critical of the way in which the industrial tribunal procedures have been followed. I know of one case in my constituency, at Trico, where resource to an industrial tribunal did not lead to the solution of a problem concerning equal pay, and the result was a long and bitter strike before the issue was resolved.
It is important to look again at this aspect of the matter, taking some account of the views that have been expressed, to see whether the industrial tribunal procedures are working properly, because part of the intention was that they would resolve disputes of this kind without recourse to strike action and all the inconvenience and damage to the national interest that follow such action. More women on the tribunals might help. Perhaps the point made earlier about the imbalance there is relevant.
The major load of the work of the tribunals concerns unfair dismissal. We on the Conservative Benches remain convinced that aggrieved employees should have statutory rights in this respect. We introduced those statutory rights, and we stand by them. But we need to learn from the experiences of the past six years. Let me return to the Secretary of State's speech and to the figures that he gave. He said that in the 12 months ending 30th June last there were 39,000 such claims, of which 10,000 were withdrawn, 12,000 were settled by conciliation, and 17,000 went to tribunals, of which 5,500 were successful and 11,500, 67·6 per cent., were turned down.
The 10,000 that were withdrawn we can put on one side. Probably they were withdrawn at a fairly early stage, perhaps as a result of discussions with officers of the Advisory, Conciliation and Arbitration Service. Certainly, not a

great deal of time or expense would have been involved in dealing with the claims that were withdrawn.
Let us take, then, the 12,000 cases which were settled by conciliation. In what proportion of that 12,000 was there genuine conciliation? In how many of those 12,000 cases were the employers paying £50, £100 or £200 so as to cut the inevitable losses that they faced? It is important to recognise that it is now a fairly expensive business for employers to defend cases at industrial tribunals.
Mr. Jayne of the National Federation of Building Trades Employers, who spoke on this subject at the recent CBI conference, gave some estimates. He said that in his experience the costs of defending such a claim varied between £400 and £1,500. That was the cost of representation. It had nothing to do with any compensation that might be awarded. He gave £600 as a typical figure. If it costs £600, win or lose, for employers, it is no wonder that many of them, perhaps on advice from solicitors, who try to settle out of court if they can, say "We shall pay the smaller sum in order to avoid the larger loss", even when they are absolutely certain in their own minds that the dismissal was entirely fair. That is the aspect of the matter which causes considerable concern.
Also, there is the growing legislation of tribunal proceeedings.

Mr. John Page: Would my hon. Friend be kind enough to answer a question to which I should know the answer? Is it possible to obtain costs in these instances? If so, is the case always brought by an individual?

Mr. Hayhoe: I shall say something about costs in a moment. Certainly, it is a relevant question. There is little chance of obtaining costs that amount to anything like the sum of money involved.

Mr. Greville Janner: Would not the hon. Gentleman agree that the greatest cause for concern in the figures that he has put before the House is that two-thirds of all claims brought before the tribunals fail? Does he not consider that the greatest cause for concern is that employees do not succeed before the tribunals and that there are many reasons for that lack of success, other than his suggestion that their cases are not good enough?

Mr. Hayhoe: I find that a somewhat extraordinary intervention. However, I shall say something about the proportion of cases that succeed and those that do not.
The fact that 67 per cent. of cases do not succeed is a reasonably clear indication that a substantial proportion of that number probably should never have been brought. However, one is concerned, too, about the growing legalisation of tribunal proceedings. As legal remedies have been provided, it follows practically inevitably that more and more of the proceedings become involved in the legal bureaucracy. The decisions of other courts are referred to and the whole thing, instead of being the fairly simple, rough-and-ready, quick way of resolving these disputes for which many of us had hoped, is becoming a fairly legalistic procedure. In some people's minds that raises the feeling that the claimant ought to have legal aid.
I know that the hon. and learned Member for Leicester, West (Mr. Janner) has raised questions on this issue. Some legal aid applies now. I believe that an individual may receive £25-worth of advice from a solicitor. Also, the limit applying to legal aid in other areas might well exclude many of the people who are taking these claims to tribunals. I should prefer to see not an increase in the legalisation trend but rather a way of reversing it and moving back to greater simplicity.

Mr. John Watkinson: The hon. Gentleman is on to a good point. However, is he aware that one of the reasons why the industrial tribunals are becoming so legalistic—to use his term—is that the employers are now almost invariably taking on solicitors or counsel to fight their cases. If employers were prepared to send in their personnel officers, instead of engaging legally trained people, the hon. Gentleman might have what he seeks.

Mr. Hayhoe: I do not think that that is the whole story, although clearly it is relevant. I believe that the way in which the proceedings have developed has led employers—on seeing the way some judgments have gone when they have acted in their view, entirely properly—to believe it is right to spend substantial sums of money to defend themselves. They

believe they have to defend themselves against the possibility of having to pay large sums in compensation awards and to defend their interests as good employers. The standing of an employer in a town may well be affected if cases are allowed to go by default, so that an employer is seen to have accepted that he has been dismissing some of his staff unfairly.
There are many reasons. I do not think that the blame should be attributed solely to the fact that employers seek legal advice to defend their interests.
More could be done to reduce unnecessary time-wasting and the expenditure of money than is done now. In this connection I welcome the new guidance which, I believe, the chairmen of industrial tribunals have given—that a pre-hearing review should take place when it looks as though a case may be outside the scope and jurisdiction of the tribunal, so that the thing is stopped before it goes beyond that stage.
While I appreciate that costs may be awarded—we come here to the point raised by my hon. Friend the Member for Harrow, West (Mr. Page)—if the tribunal decides that the action taken in either making or defending the claim was frivolous or vexatious, there is, I believe a great deal of anecdotal evidence—I have seen no full-scale reviews—that this does not prevent abuse. A great deal of abuse is, I believe, going on, and I understand that in practice when such awards of costs are made they tend to be in the region of £35 to £50, which is quite small compared with the figure of £600 that may be involved in all the time and work of people concerned on the employer's side.
Again, therefore, this shows that the balance of the way the tribunals have been working has been such as to make it more likely that an individual who has not a ghost of a chance of sustaining his claim but who goes to the trouble of making it—there is very little trouble for the dismissed employee—has, first of all, a chance of getting a conciliated settlement under which the employer pays him off just to avoid getting deeper into paying costs in defending the action. There is also always the possibility—to return to the Secretary of State's analogy—that by some strange chance in pulling the lever of the industrial tribunal fruit


machine the claimant will receive a jackpot award that he never dreamed of.
Another problem is the waste of time that can occur. The failure of either party to attend the proceedings obviously causes great difficulty, and it is normally more costly to the employer than to the employee. I wonder whether further consideration could be given to the Scottish system which, as I understand it, works in the following way. The tribunal staff check that the parties are available. Then the tribunal deals with the case on the day when people have agreed to attend even if one party fails to show, unless there is a proper excuse arriving at the tribunal in time. In order to cover the case where one or other of the parties may genuinely be prevented from turning up for reasons outside its control, there is the possibility that, if the excuse is made late, the result can be reviewed in the light of any new evidence that may then become available.
That seems a much more sensible proceeding than that which, I understand, happens now on some occasions, when the employer turns up but the employee who is claiming unfair dismissal does not. This can happen not once but twice, and only at the third time is action taken. This places a heavy load on employers and their advisers, and it requires to be looked at.
I turn now to the question of the awards of compensation that are made. The Department of EmploymentGazette is an excellent publication, and I congratulate those who have been responsible for improving its contents in recent months. This month's issue publishes interesting figures about unfair dismissal cases in 1976. One sees that in the last six months of 1976 in only four of the 811 awards that were made did the amount exceed £5,000, and only 39 exceeded the £1,500 mark.
Those figures are not well known, and small and medium-size employers are often genuinely fearful of the liabilities that may exist. Many of them are not taking on employees because they are fearful of what may happen if they find that, after an employee has been in a post for six months or over, for one reason or another, the expected upturn in business has not occurred or the employee is unsatisfactory. If they want to revert to their original size of staff, they have a

heavy financial liability. Whether their fears are wholly justified by the facts is beside the point, because their perceptions of these provisions in fact destroy job opportunities.
If Ministers say, as they have in the past, that the Employment Protection Act and similar legislation does not affect the possibility of people obtaining jobs, they live in a totally unreal world. I go around the country meeting many small and medium-size employers, and it is a story one hears with sickening regularity. I am telling Ministers the facts of the situation, that there is genuine worry, and if perceived fear is sufficient to tip the balance, many people are out of work today because of those provisions.
Another aspect which causes concern is that the legislation makes the employer guilty and he has to try to prove his innocence in these situations. That is the legislation and we cannot try to change it today, but would it not make the whole procedure more even-handed if the employee had to give, before the matter came before the tribunal, his or her reasons for thinking the dismissal unfair? Why should employers have to wait until the hearing in order to discover the reasons? Sometimes it is possible to ask for information before.

Mr. Greville Janner: Always.

Mr. Hayhoe: My information is that in many instances the information is not supplied. I am glad that the hon. and learned Member for Leicester, West is with me. He believes that that situation already exists. But if I am right, and the situation does not exist, I hope he will support me in calling upon the Secretary of State to take the necesssary action to ensure that employers do not go blind to the tribunal, in ignorance about the claimant's reasons for saying that his dismissal was unfair.

Mr. Greville Janner: Is the hon. Gentleman aware that there are provisions for requests to be made to the tribunal before the hearing for particulars of the document—the details of the case—and for the documents themselves? The hon. Gentleman's intervention is useful because it should emphasise that people should make use of the procedure which is there. At the moment people do not know it is there, and therefore they do not make use of it.

Mr. Hayhoe: I gather that the existing procedures are permissive. I should like to see them toughened up—although not to make things too legalistic again. I do not want it to get to the state where the pleadings would have to be stuck to without any possibility of change. But, on the information I have had, it seems there is the possibility of some useful and helpful change in that direction.
Again, one sees excessive legalism in some of the decisions. Perhaps it has already been overturned on appeal, but I saw a case in theDaily Telegraph of 12th November of someone who had been dismissed for stealing and who had then been sent to prison and who, after coming out of prison, had won a case before an industrial tribunal on the ground that he had not been given the written reason for his dismissal within the 14 days laid down by Section 70, I think it is, of the Employment Protection Act. But he had not been given that written reason because the police had specifically requested his employers not to give it. I submit that that is legalism gone mad. In order to maintain law and order the police ask someone to behave responsibly, but he then gets penalised and taken to the tribunal and has to pay—I think the award was two weeks' compensation—in a matter of this kind. One hopes that the decision will be overturned on appeal, but if it is not, something is very wrong with the situation.
I shall say a word more about compensation. The maximum amount at present in this very special case of someone aged 62 with some 20 years' service who has been dismissed and who gets a special award is £11,760. I understand that the Government intend—provided they get the support of both Houses of Parliament—to increase the limits by 25 per cent., which would increase that figure to £14,700. Perhaps the Secretary of State will confirm what will happen if the proposals he is making are brought in.
But the average award is very much lower at about £350. It would be helpful if more people understood that amount. Some of the stories that are spread do no service at all to the whole procedure that should be operating in this area.
The suggestions that I have made could help allay fears among small and medium-sized employers who are very

worried about the additional bureaucratic, legalistic burden placed upon them, much of it involving attendances at industrial tribunals. But there are some other nasty tendencies at work.
My hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight), raised a very important point at Question Time last Tuesday. She referred to clerks in employment exchanges urging dismissed persons to claim unfair dismissal. The Minister of State, in an uncharacteristically discourteous and arrogant fashion, brushed aside her comment as a wild allegation. I hope he has by now apologised to my hon. Friend.

Mrs. Jill Knight: Not yet.

Mr. Hayhoe: I hope that he will. Surely he is aware of the case of Mr. Caine versus Jesser Engineering which took place in Birmingham earlier this year, at which the chairman of that industrial tribunal had a number of things to say which wholly support what my hon. Friend said. The "Industrial Relations Review and Report"—a highly responsible publication, which provides a very helpful service of information—in the run-in to its description of this case states:
A number of Industrial Tribunal cases have highlighted the erroneous advice handed out on occasions by the Department of Employment. The Tribunal chairman in this case, W. R. Handforth, strongly censures the Department's officers for the views they expressed to the applicant.
It goes on to refer to the comments of the chairman that:
The advice given to the applicant by the Department of Employment was 'unhelpful' and 'totally fatuous'. According to the Industrial Tribunal, rather than advising him to report the matter to the lndusrial Tribunal, 'a modicum of common sense might have encouraged the applicant to return to work and allow the foreman to carry out …
and so on. Then, significantly, the chairman went on:
This is by no means the first time that the Tribunal has had occasion to criticise the irresponsible advice given by the Department of Employment".
In these circumstances it was wrong for the Minister of State to castigate my hon. Friend the Member for Edgbaston and accuse her of making wild allegations when she was doing no more than raising points that quite naturally arose out of a


case that was heard close to her own constituency, and for all I know it may well have affected someone within her constituency.
I have made a number of suggestions for improvements in the way that we deal with industrial tribunal matters. I have covered only some aspects of this complicated pattern. There are many more that could be dealt with and perhaps will be raised in the course of this debate.
I hope that the debate will produce useful and constructive criticism. At the very least, it will provide an opportunity for the Minister of State to apologise to my hon. Friend the Member for Edgbaston, who certainly deserves an apology, and for the Secretary of State to withdraw his unhelpful and misleading comment about the industrial tribunal proceedings being an industrial relations fruit machine. At best, this debate can provide suggestions that will lead to general improvements both in the composition and practice of industrial tribunals. Both those reforms are much needed.

4.46 p.m.

The Secretary of State for Employment (Mr. Albert Booth): The hon. Member for Brentford and Isleworth (Mr. Hayhoe) knows that he grossly misrepresents my position when he suggests that I have said that I regard the industrial tribunal system as being an industrial relations fruit machine. If the hon. Gentleman had gone on to read a further sentence of my speech, he could then have gone on to make clear to the House that I was referring to the number of cases in which large awards came about. I went on to say that:
The median award for unfair dismissal is currently £355.
That is precisely the point that the hon. Gentleman made.
What I said is made clear right from the beginning of the sentence. I quote:
There are a very few cases where that can happen".
That is the truth. I continued:
usually where a rare jackpot of circumstances has come up on the industrial relations fruit machine.
I said that there were very few cases. No one can fairly represent that as suggesting that I expressed the view that

the industrial tribunal system was a fruit machine—far from it. I have a great deal of respect for the system and for those who work it.
I welcome the debate because it gives me an opportunity to say something about that system and about the recent wave of attacks—from the Press and others—on the tribunals, and to make clear that much which has been said has been both misconceived and damaging to a valuable system.
Over the past 15 years the House has built up, piece by piece, legislation to provide a wide range of important individual rights for working people. In doing that, the House has had three main objectives in mind: first, to secure a greater measure of social justice throughout a person's working life: second, to provide a reasonable measure of job opportunity for working people; and third, to outlaw discrimination in employment on the grounds either of sex or race. The hon. Member for Brentford and Isleworth has outlined some of the legislation which has given rise to that system and some which has, in so doing, created work for industrial tribunals.
I would be the first to agree that many of the rights have come about to a large extent as a result of the Employment Protection Act. It was that Act which, for the first time, introduced such rights as guaranteed payments for workers on short time; maternity leave rights—and the right to be paid for that leave; protection for trade union membership and activities; and the right to time off from work for public duties.
Of course, many more rights have been created and it would be surprising if there were not a corresponding increase in the number of cases coming before industrial tribunals. However, I plead with the House to keep the matter in perspective and to look at the numbers coming before tribunals to see whether they are commensurate with the range of rights that this House has provided.
In 1972 there was a total of 6,340 industrial tribunal hearings. In 1973 there were over 7,000, as there were in 1974, in 1975 the number went up to 12,000 and in 1976 there were 19,000—a little over three times as many cases for the vast increase in rights provided by this House for individual workers. I believe that


what the hon. Gentleman and many of his right hon. and hon. Friends are trying to do—in fact, it appears to be Conservative Party policy now—is to represent this legislation as a burden upon employers. That seems to be their theme. I and my hon. Friends see it as a legal framework that reflects and supports the practice of the good employer in this country.
The right hon. Member for Lowestoft (Mr. Prior), on one of the occasions when he was in agreement with his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), put his name to a document issued by the Conservative Party Central Office. Under the section headed
Removing the obstacles to enterprise
there appears this very revealing sentence:
We want to ensure that all those concerned with industrial prosperity … are brought to understand how recovery is being hindered by the operation of some parts of employment law, so that the necessary changes can be made with as much good will as possible.
It is most surprising, therefore, that we have not heard today from the right hon. Gentlemen what are the changes they want to see. They are saying that changes are necessary. The least they could have done out of courtesy to the House was to outline some of those changes. From what the hon. Member for Brentford and Isleworth said, I take it that they do not want to see any changes in the unfair dismissal law. I shall study carefully inHansard what he said, but that was the impression I had.
The criticisms that the hon. Gentleman was making in this area, the area which unquestionably produces the largest number of industrial tribunal cases, were issues of slight changes in the method of proceeding before tribunals and not of taking away any individual rights. If that is not so, the right hon. Member for Lowestoft will tell the House and we shall hear just what changes in law he and his right hon. Friend the Member for Leeds, North-East had in mind when they put their names to the document issued by their party's Central Office.
I believe that these individual rights of employees are underpinned by the industrial tribunals. Those who are now criticising the tribunals are really criticising the law which the tribunals

administer. Individual workers who believe that they have been denied their statutory rights should be able to obtain an effective remedy from what, in effect, is a labour court. The labour court can deal with complaints relatively informally and speedily. Its proceedings are understandable to the employer and the employee, and, of course, it not only understands the law but understands the realities of day-to-day industrial and commercial life.
That is the task which the industrial tribunals have to undertake. Over the past year they have been aided by the Employment Appeal Tribunal, which has done a great deal to give guidance to the tribunals, to ensure consistency of decisions up and down the country and to establish some unambiguous criteria by which tribunals can work.
I would be the first to admit that tribunals are faced with a difficult task. On the one hand they have to provide some fair decisions across a very wide area of law—decisions which, if necessary, stand up to the rigorous test of the Employment Appeal Tribunal. On the other hand they are called upon to act quickly and informally. These twin goals are not easy to achieve. A delicate balance has to be struck. In general, I think that the tribunals, which operate within a procedural framework laid down in regulations, get the balance about right.
It goes without saying that the tribunals can operate effectively only if they have the support and confidence of employers, trade unions, and individual workers. That is why I am so concerned today, because those who mount general attacks upon the tribunals tend to undermine confidence in them and by doing that they undermine the very rôle of the tribunals. I should not wish to argue that the operation of the tribunals is perfect or that the procedural regulations within which they work cannot be improved. My Department and the presidents of the industrial tribunals are in close touch with both sides of industry on many areas of the workings of the tribunals. In a number of cases we have made detailed changes in order to meet some of the criticisms of procedure.
I shall be happy to write to the hon. Member for Brentford and Isleworth drawing his attention to changes which


have already been made and which go even further than he suggested they should. I think my information would meet his criticism that the procedure might be speeded up or might deal with difficulties faced by employers who have to attend on more occasions than may be necessary. We have taken those criticisms to heart. We have worked out ideas with the presidents of tribunals and have largely met them.

Mr. Nicholas Scott: The Secretary of State is attacking my hon. Friend and others for their criticisms of tribunals and the way they work, yet he is saying that the tribunal system is responding to the criticisms that are being made. Surely it is right that there should be intelligent discussion about the way any system operates. We have that, and it should be flexible enough to respond and to improve itself all the time.

Mr. Booth: I suggest that the hon. Gentleman is confusing two things. Naturally, I agree that there should be intelligent discussion and constructive criticism. But what has been mixed up by his right hon. Friend the Member for Lowestoft is a general attack on tribunals and an attack upon employment law with the details of tribunal proceedings. Of course we can improve on the details of tribunal proceedings, and we are only too ready to do so. It is in the interests of all hon. Members to bring about such improvements.
The question of unfair dismissal, which is the area that has given rise to the majority of cases—it has undoubtedly been the area most frequently criticised—accounts for approximately three-quarters of all the applications made to industrial tribunals. I believe it is true to say that the statutory right not to be unfairly dismissed has been supported by both major parties for a number of years. The scope of the matter has been the cause of controversy, as it was in relation to the Employment Protection Act. There has, however, been general support for the proposition.
I therefore think it worth while to reflect on what the Donovan Commission said on this subject, to see how far we have reached since 1968 and the Donovan Report. Donovan said:
There is usually no comparison between the consequences for an employer if an

employee terminates the contract of employment and those which will ensue for an employee if he is dismissed. In reality people build much of their lives around their jobs. Their incomes and prospects for the future are inevitably founded in the expectation that their jobs will continue. For workers in many situations dismissal is a disaster.
That was Donovan's view, not mine.
I suggest that it was on that view that the House debated the proposition of how we could enshrine within the law the concept that it would be illegal to dismiss someone unfairly. I think that the way in which Donovan has posed it explains why, on grounds of social justice alone, it is necessary to have such a statutory right. The hon. Member for Brentford and Isleworth complains that it is relatively easy for an employee to pursue his case. I ask the hon. Gentleman to follow the logic of his own proposition. What barriers is he prepared to put in the way of that employee in pursuing his case? How much harder does he want to make it for an employee? I hope I shall show that there are important considerations which deter employees from proceeding with claims which are not justifiable.
The legislation demands only that the employer provides employees with a reasonable measure of job security. It requires the employer to observe a few reasonable industrial relations procedures. For employers to do that is not only socially just; it is industrial common sense. They and the country as a whole are amply repaid by the very large improvement in industrial relations that comes about when these procedures are properly observed.
One has only to consider the number of strikes that took place in this country on the very issue of alleged unfair dismissal before we had unfair dismissal legislation. That gives a very strong guide as to what has been happening. But I also think that it behoves any hon. Gentleman speaking from the Front Bench in this House, and going outside to speak about it, to create a far better perspective and a far more intelligent appreciation of the actual size of the work of industrial tribunals.
I have recently read comments that would lead one to believe that employers face an overwhelming task in dealing with the number of unfair dismissal claims. That is not the case. The number of tribunal hearings for unfair dismissal last


year was 13,400. That is one for every 1,600 employees. One employee out of every 1,600 actually pursued a case at a time when 8 million job changes took place in this country.
Even if one extends the consideration to take in all hearings—not just unfair dismissal—there was a total of 19,234 hearings in this country last year. That is to say, less than one in 1,000 employees pursued a case before an industrial tribunal.
If my understanding of what constitutes a small employer is right, there can be precious few small employers who were faced with considerations of going before industrial tribunals if less than one in 1,000 employees on average pursue their case to that level. Of course, an employee who brings the case of unfair dismissal to a tribunal is very much the exception and not the rule. The majority of cases are sorted out long before that stage. About 60 per cent. of the applications have been settled without a hearing, many of them through the good offices of ACAS.
There has also been a great deal of exaggeration about the size of the awards, the point on which I started. A recent article in theDaily Mail stated that
Awards in the region of £5,000 are not uncommon".
What would that lead any fair reader to believe? So far this year, out of thousands of cases that have been heard, there have been only eight awards of compensation of £5,000 or over. Yet theDaily Mail says "not uncommon".

Mr. Greville Janner: Does not my right hon. Friend agree that one of the reasons for low awards is that an employee can only prove his loss up to the point of the hearing and tribunals do not have the power to say "Go away. Try to get another job and then come back."? Instead, they make a stab in the dark and try to give an employee who has been unfairly dismissed not only a loss that he can prove but a certain loss ahead. Therefore, employees receive not the two-year cover which the law intended but something very much less.

Mr. Booth: I appreciate that a very serious question which has to be answered is whether it is more desirable for a tribunal to settle the case completely or

whether it is in the interests of justice to the applicant to prolong the procedure and have him come back. I regard that as a serious point to be considered.
However, the point I am making is not that awards are too small or too large but rather that the size of the awards is being grossly misrepresented. If this is perpetuated, and if one tells a big enough lie long enough and often enough, it may seriously affect employers' attitudes, which may be detrimental to the tribunal system, detrimental to their own interests and detrimental to industrial relations generally.
It was said that in my speech to the chamber of trade I did not include among the costs that I mentioned the cost of legal representation. That is absolutely right. I was not talking about the cost of legal representation. I was talking about the size of the awards—the very point that theDaily Mail was talking about in the article to which I have referred.
After all, to a large degree it is in the hands of the employer and the applicant whether they engage in practices of representation which involve them in legal costs. When this House set up this right, it was not intended that people would have to involve themselves in very heavy legal expenses to have hearings. I therefore suggest that too many employers insist on being legally represented in cases where it is not really necessary to do so. There is now an increasing tendency, of course, for employees to be legally represented if they see the employer represented by a professional legal representative. But the current position is that about 50 per cent. of employers—not the overwhelming majority—are represented in tribunal cases compared with about one-third of employees.
I am by no means sure that this is a desirable development. I hope that there will be some rethinking of whether this trend should continue. There is a risk. I know very well that representation is desirable, if not wholly necessary in some complicated cases where the evidence needs to be sifted very carefully or where novel points of law are raised. But if this leads to a more cumbersome and legalistic procedure before tribunals I think that it will produce a result which the House did not desire when it enacted the legislation.

Mr. David Madel: Does not the Secretary of State accept that, if an employer in a medium or small town is not to get a bad name, he has to take every action he can to make sure that in a particular case every point of law has been considered? Surely there is nothing strange about that?

Mr. Booth: I certainly accept that an employer can be very concerned about whether there will be an adverse reflection on his reputation as an employer arising from a decision that he unfairly dismissed someone. I respect the employer's concern about that. But I equally respect the position of the worker before the tribunal. His reputation is at stake as well when he goes ahead with an unfair dismissal case.
What is the position if that worker goes along to his next employer, applies for a job and is asked for his references? He might say "I have no references because I was fairly dismissed or because the tribunal decided that I was not unfairly dismissed". That worker has only one reputation as a worker, and he puts that on the line. That is at stake when he goes before the tribunal. Although I respect the position of the employer, he does not have quite so much at stake. It might be accepted that possibly a member of the management acted in a way not characteristic of the firm in bringing that situation about. But the employee puts his one reputation at stake when he goes before the tribunal.
There is, of course, also the consideration of the money involved. The cost of legal representation can be high for the employee as well. If an employee is found to have been not unfairly dismissed, he is involved in costs as well. I do not accept the general proposition that it is very easy for the employee and that there is nothing at risk if he pursues a claim of unfair dismissal.
I should like to have details of any advice which has been given by any official in my Department which has been misleading to an applicant. If I can get evidence of that kind, I can assure the hon. Member for Brentford and Isleworth that it will be carefully pursued.
I wish to turn to the question of small firms, for which this is said to be a particular problem. I readily appreciate that

people who run small firms have a considerable task in familiarising themselves with all the provisions and legislation that have come about in this House in 15 years, particularly the Employment protection Act, which has brought new rights to light. It is with that in mind that I am looking carefully at the points put to me by organisations representing small firms to see whether we can improve the procedures of tribunals to ease their difficulties. I shall also consider any suggestions that are made in today's debate.
I emphasise that up to now I have seen no hard evidence to support allegations about the adverse effects of employment legislation on the labour market. However, in view of the importance of these allegations we are monitoring certain parts of the legislation and we have already commissioned research into its effects on the labour market.

Mr. Kenneth Lewis: Many people, including myself, believe that the Government did a disservice to workers and to small and other businesses when they reintroduced the six-month period. Many people believe that six months is not long enough. A firm may take someone on for six months but then find that it needs that person for a longer period. Something then happens, and that person might be dismissed. This short period of time is creating many problems.

Mr. Booth: The six-month limit was one of the changes brought about in the Employment Protection Act. That will be one of the matters covered when the effects of the changes are monitored. Another change was to bring into the scope of the Bill employers with fewer than five workers.
Do the changes which the Opposition say are necessary include a change in that respect? Do the Opposition believe that six months is too short a period? Do they take the view that small firms should be exempt from the legislation? That is not the Government's view. The Government are totally opposed to the proposition that there should be first-and second-class workers. They oppose the proposition that those who work for small firms should have less legal protection than those who work for large firms.
The legislation which has led to the working of the industrial tribunals has


brought to working men and women an important range of individual rights. The tribunals play a fundamental rôle in giving to those who are denied these rights an effective remedy. If the debate does nothing more than enable the attack on this rôle and these rights to be refuted, it will be worth while.

5.12 p.m.

Mrs. Jill Knight: The Secretary of State's speech will be received in the country with dismay. In large sections of it he appeared to fail to understand the reason for the industrial tribunals system occasioning such concern outside the House. Of all his statements the most extraordinary one was that this legislation backed up good employers. Good employers do not sack people unfairly. Good employers frequently are dragged in front of the industrial tribunals when they have done nothing wrong. Even when the tribunal absolves them, the cost that they have to bear is immense. The Secretary of State said that he had no evidence that the legislation acts unfairly. I beg him to read the reports from the CBI conference last week. Ample evidence that it does act unfairly was given at that conference.
The Minister of State, in a reply to me last week, not only was tetchy but showed a sad failure to grasp that the workings of the tribunals are causing great and serious problems. Having heard the Secretary of State today, I am not surprised that the Minister of State took that attitude. It is a wrong attitude. The Minister of State was rather complacent about the numbers involved and the way that they have increased. Different figures have been bandied about this afternoon, but the figures that the Minister of State gave me clearly indicated that there is no reason for complacency. In 1972, 1,854 cases came before the industrial tribunals. By 1976 the number had risen to 13,400. How can that be a matter for anything but grave concern? Those figures referred to the cases that reached the tribunals. Many more were withdrawn.
The cost to industry of industrial tribunals in the way in which they deal with unfair dismissals is enormous. The cost to the taxpayer is disgraceful and the cost in terms of job opportunities is serious.
Let us first consider the cost to industry. The House should not forget that 800,000 small businesses are struggling to make a living. Small businesses are important to the country not only in terms of production but because they provide jobs. Last year there was a record number of bankruptcies among small businesses. If something is not done soon, I fear that we shall achieve another record this year. One of the heaviest of all the burdens that small businesses have to carry is the industrial tribunal. That was spelt out by the CBI last week. Anyone can go to an industrial tribunal and claim that he has been unfairly dismissed.
The Minister of State said that when a person goes to the Department of Health and Social Security to claim unemployment benefit after being dismissed the clerk at the office does not suggest to the claimant that he should ask for the case to be considered by an industrial tribunal. Employers in the Midlands have no doubt that such advice is given to people who are dismissed, fairly or unfairly. The attitude that is taken is "You cannot lose anything by applying to an industrial tribunal".

Mr. Greville Janner: rose—

Mr. Deputy Speaker (Sir Myer Galpern): The hon. and learned Gentleman has indicated that he is anxious to catch my eye. The time available for Back-Benchers is very short indeed. I hope that the hon. and learned Gentleman will restrain himself and avail himself later of the opportunity to take part in the debate.

Mrs. Knight: It is important for everyone to understand that no one from either side of the House is suggesting for a moment that people who feel that they have been unfairly dismissed should not have an avenue of appeal. Of course they should.
I am talking of cases such as one that occurred in the West Midlands. It involved a man who was a persistently bad timekeeper. He was warned repeatedly that if his bad timekeeping persisted he would be sacked. After about a year of bad timekeeping he was sacked. When he went to the DHSS he was told about the unfair dismissal procedure. He applied. He did not win his case but three days were wasted deciding whether warnings had been given in


writng or verbally and about how those warnings had been put to him. Yet he knew at the outset that he did not have a case for unjust dismissal. He admitted that he had been warned and that he was a bad timekeeper. It seems an utter waste of the tribunal's time for cases such as that to be heard.
Another such incident was reported to me only this morning. It concerned a foreman on a building site. One of his team of workmen threw half a brick at one of the other workmen, and the brick struck the man under the ear and felled him. The foreman sacked the man on the spot, but the case was taken to the industrial tribunal. The tribunal found in favour of the dismissed man because, it was said, he had never been warned that if he threw half a brick at someone and hit him he would be sacked. That case cost the employer a great deal of money.
The employer is bound to lose even if he wins the case. The onus is on him to show that he acted fairly. That means that he must prepare his case and provide witnesses; and that puts a great burden on small firms which do not have the resources for this purpose. They cannot afford to pay persons to go into court and they cannot spare the time of their executives to appear for them at the tribunal.
It is all very well for the Secretary of State to say that a company does not need to have a solicitor, but if it is compelled to send one of its top executives to spend two or three days in court that can represent a severe cost to the company. Under our law it has always been held that a man is innocent until proven guilty. With the industrial tribunals the employer is guilty from the start, and the onus is on him to prove his innocence. This fact is leading many employers to settle out of court. They know that if they do not settle they will have to spare at least the time of executives or witnesses to fight the case. More and more employers are going to the claimant and offering, say, £200 to induce him to drop the case and to go away. Firms simply do not have the time to fight the case.
The Secretary of State claimed that the legislation worked for better industrial relations. However, this practice of settling out of court has a most demoralising effect on the staff who remain. They

often fully agree with the dismissal because they have seen exactly why the person has been dismissed. It is bad for industrial relations when someone who is guilty of offences which warrant dismissal gets a sum of money simply to deter him from going to the tribunal.
We come then to the cost to the taxpayer. The chairman of the Birmingham industrial tribunal referred to the waste of public money only last week. He said:
I want to draw your attention to the way your taxes are spent"—
he was addressing his remarks to taxpayers.
Two whole days have been spent on this piffling dispute.
To my certain knowledge, babies are dying in Birmingham because there is not enough taxpayers' money to pay into the National Health Service. Members of the public are in danger from fire, vandalism and thuggery because we do not have enough taxpayers' money to pay the firemen and the police. In those circumstances, I do not see why we should be paying money in this way for industrial tribunals.
The Secretary of State said that employers could always get costs. But who foots the bill? It is the taxpayer, if the employer is lucky enough to win costs, and even that is in dispute. We are talking about a very great sum of money which the taxpayer has to pay on such "piffling" cases.
I come to the question of job opportunity. The Secretary of State seems totally to have failed to grasp this point. He said that the scheme extended job opportunities, but I am afraid that he was totally wrong, because it cuts them back. Many business men say quite openly today that they are so worried about the law in this respect that they are strenuously avoiding going beyond essential recruitment. Schemes to increase the number of jobs could be embarked upon, but employers are holding back through fear of future claims of unjust dismissal.
It is clear from what business men have said at the CBI conference and to hon. Members in their constituencies that expansion is "out". They refuse to enter into short-term contracts to employ because of the problems of dismissing employees once they are hired. Yet


a short-term contract is important in two respects: first, because it does a job that needs doing to work, and, secondly, because it eases unemployment. This legislation is a deterrent to employment in the West Midlands, however, and the dole queues are longer because of it.
What is to be done? It has been suggested that there should be a better system of vetting applications to take cases to tribunals. That could certainly be examined. It is said that a certain amount of vetting is already done. Perhaps the idea of a financial deterrent is better. No one wants to cause harm to an applicant or diminish the justice due to someone who is unfairly dismissed, but a financial deterrent would curb the vexatious complaint and the person with nothing to lose. If such a person had to pay a certain amount into court—it could be only £5 or £10—he would not take a piffling case before the tribunal but he would get his money back if his complaint was upheld. If he went to court and the finding went against him, however, he would lose his money.
I ask both Ministers to appreciate that this is not a party matter. It is a matter which goes to the heart of industry and is an issue of great seriousness. It cannot be shrugged aside with the complacent view that the difficulties do not cause grave concern.

5.28 p.m.

Mr. Greville Janner: This is a complicated and delicate area of law, and if the understanding of that area by the average employer is anything like that of the hon. Member for Birmingham, Edgbaston (Mrs. Knight), it is no surprise that employers are afraid of it. If only they took the trouble to discover the law in so far as the courts have succeeded in interpreting it, they would take a different approach.
I take the example of the short-term contract, to which the hon. Member referred. To my knowledge—which is very wide on this issue—there has not been one case in which a person on a short-term contract that has been properly documented who accepted the contract on a short-term basis has been held to be dismissed unfairly when the term of the contract ended. I feel that the hon. Member and her hon. Friend the Member

for Brentford and Isleworth (Mr. Hayhoe) do not like the entire system and they are attacking what Lord Justice Sachs described as the right of an employee to his job, which is the right of a person not to be unfairly dismissed.
The tribunals operate rough and ready justice, and some of the chairmen and members are not necessarily those whom one would have picked oneself. In the main, however, these people are doing an excellent job and the House should pay tribute to them for their efforts to do justice.
The attack on the legalisation of the system is inevitable because, as Mr. Justice Donaldson remarked in the days of the National Industrial Relations Court, the days when this area can be operated as a means of palm-tree justice where the judge sits under a coconut palm dispensing his own rules are gone—because of, amongst others, Lord Denning. When one has the problems of constructive dismissal interpreted, re-interpreted and re-re-interpreted within a period of two months, it is amazing that anybody can manage without a lawyer at all.
One has the rights of employees who work overseas, people who work partly in this country and partly outside, only now given a rational interpretation. One has the problems of fixed-term contracts. I am asked why some of us campaigned to have legal representation made available to people at these tribunals. The answer is that the points of law are as great and as difficult in these tribunals as as they are in the courts. Whilst a county court now has jurisdiction up to £2,000, these tribunals have jurisdiction today up to about £12,000. They are very important places, indeed.
I deal first with how the cases arise. There have been criticisms from the hon. Member for Brentford and Isleworth and the hon. Member for Edgbaston about the clerks in the employment exchanges. I should like to pay tribute to these clerks who tell people their rights. What happens is that a man who has been dismissed goes along to the employment exchange and says "I want my money". The clerk asks "Well, why did you leave your job?" and he says "I resigned. I did not like it." The clerk then says "Maybe you were dismissed, or you were pushed out. Maybe you were forced to


resign. If you were, you are entitled to claim compensation for constructive dismissal." The ordinary person does not know about constructive dismissal. The ordinary employer does not know it. The person who tells the employee is the clerk in the employment exchange, who has been so greatly maligned today.
I believe that the employees in the Department of Employment who work in the employment exchanges do a first-class job in informing ordinary people of their rights. There are occasions when they do it incorrectly, when wrong information is given. I regret to inform the House that even lawyers have been known, on occasion, to give the wrong advice.
However, at least somebody tells the ordinary person who comes to the employment exchange "You may have rights. Go to your solicitor and you can have £25 worth, at least, of free advice." Somebody may say to him "Go to your union and inquire." The trouble in this area of law is that people do not realise what their rights may be. The employers do not realise that this is an area of rough and ready justice.
To some extent the criticisms are right. In such a system it is true that an employer cannot win and that the preparation for the case costs money. It is true that he loses time even when the employee loses a bad case. It is true that the employer's reputation is at stake. This, unfortunately, is only one side of the balance.
The other side is that a man who has gone to an industrial tribunal very often finds it difficult to obtain another job even if he wins his case, because the next employer says "Ah, a trouble-maker". When somebody goes for a job his prospective employer does not want a troublemaker on his staff. Both sides take a risk. Both sides take trouble.
The idea that an ordinary employee enjoys going to the industrial tribunal is rubbish. The ordinary person is afraid of courts and apprehensive of tribunals, and normally he is not nearly as articulate as the employer or his representative, whom he must meet.
I intervened when the hon. Member for Brentford and Isleworth mentioned the number of failures. He said that it was an extraordinary intervention. But

it is the failures that concern me, because I am convinced that many of those failures are due to a number of causes beyond the control of an employee. For example, an employer can usually obtain witnesses to help him. if he follows a fair system—this is the point of the warning to which the hon. Lady referred; we must have a fair system for people—and if he looks around, he can nearly always get somebody to testify as a witness on his side.
An employee who has been dismissed cannot do so, because his potential witnesses are still employed and fearful of losing their jobs. It is rare in practice for a dismissed employee to be able to bring corroborative evidence or to bring documents.
That is one of the reasons for the number of failures, which is a very high percentage. A second reason is that the employer is much more likely to be represented by someone articulate. I agree that in most cases it need not and should not be a lawyer. It should be somebody from the employer's own staff, who is trained, knowledgeable and articulate.
Here I pay tribute to the trade unions for the representation that they provide for their members, without which their members would go almost always unrepresented and inarticulate. My worry is that where persons are unrepresented, the chairman of the tribunal has to descend into the arena and take the part of those who are unrepresented. He is in a very delicate and difficult position because he is acting as both judge and advocate in the same cause. It is for this reason that I pay tribute again to the chairmen of tribunals for the way in which, on the whole, they manage to do things in a fair, reasonable and decent way.
Employers are right to accept conciliation in these disputes, as they are in any other. Conciliation is of very great importance. Instead of the work of conciliation officers being attacked, as it has been, the officers should be praised for the way in which they have kept so many disputes out of court.
It is true that some employers pay up because they are afraid of the nuisance value of a claim. It is equally true that many employees accept settlements because they do not wish to go to court, because they are afraid that they may


receive less, whereas had they gone there, they would have been awarded more. This is the sort of problem that arises in every legal action, in every business concern. One has to decide, as a matter of business and of good sense, whether one should settle in the circumstances.
I believe that conciliation officers, on the whole, maintain a fair balance. They are criticised for leaning too much on employers. I have friends sitting on industrial tribunals who take the view that many conciliation officers lean too much on the employee, because if the employee went to a tribunal, they believe, he would get more than the sum offered by the employer to get rid of the case. So there is that balance.
We have here a system set up in 1971. It was one of the few matters under the Industrial Relations Act not in dispute. This system emerged from "In Place of Strife". It went through this House without difficulty or dispute. On the whole, it has worked pretty well.
How can it be improved? There may be ways in which a preliminary investigation or a view may be helpful, but I am very much against the system which used to operate, with some tribunal clerks telling people that they had no chance, because sometimes the cases that look as though they have not a chance are those that are won, and cases looking as though they are going to be won are lost. Every lawyer knows that. It is very difficult for the clerks to know the job and to know the law.
I believe that, in spite of all the problems, some of which are perfectly genuine and which have been raised on behalf of the employers, the balance is in favour of justice. The balance has given people a right to their jobs. The balance has been reasonably well held. In so far as the balance has tipped in the wrong direction, I think it has tipped not against the employer but against the employee.

Mr. Graham Page: I am sure that with all his experience the hon. and learned Gentleman would agree that the originating application, the IT 1, is very insufficient usually for the employer to answer it, to know what case he has to meet. Would it not improve the whole

proceedings if there were some process in the early stage of the IT 1 that was really a statement of claim of some sort? Should not the employee be helped in putting the case so that the employer knows what case he has to answer?

Mr. Janner: I think that there is a good deal in what the right hon. Gentleman says. On the other hand, once one enters the realm of statements of claim, one is meeting legalisation of the process, which the hon. Member for Brentford and Isleworth was trying to avoid. I believe that both sides are entitled to know the case that they will have to meet. I believe that it is right, under the Employment Protection Act, that written reasons for dismissal have to be given by the employer within two weeks of the employee's request. There is no reason why an employee should not be asked to set out in ordinary English the nature of his claim and why he sees his dismissal as unfair. It does not work out like that at the moment, and I hope that my right hon. Friend will look at this, because it is an eminently sensible suggestion.
When one reaches the end of the trail, what is there? My right hon. Friend mentioned a fruit machine. It is not quite a fruit machine, but all litigation is a gamble. At the end of the trail the compensatory award was £4,160 in 1971; it went up to £5,200, and it has apparently stayed at that level. In answer to a question from me my right hon. Friend said that the basic award would go up to reflect inflation and that part of the additional award also would be increased to reflect inflation. But the compensatory award, which is so seldom reached, is to remain at the same level. I urge him to reconsider this. The level of compensation should rise along with the rest of the awards. I cannot see why it should not.
We have a system that requires consideration and possible amelioration, but the sort of attack that we have heard from Conservatives is unworthy of those who really understand the basic need of an ordinary worker at every level—from the chairman to the foreman, from the shop floor to the board room—to retain his job. These powers have done a great deal of good, and I pay tribute to those who have enabled this to be so.

5.41 p.m.

Mr. Jonathan Aitken: I find myself in some measure of agreement with the hon. and learned Member for Leicester, West (Mr. Janner), who highlighted the difficult plight of those who think that they have been dismissed unfairly and have a bona fide case for appearing before a tribunal without assistance or representation. These circumstances are particularly acute in cases of closed shop unfair dismissal where the worker does not even have the support of the union.
In its critical analysis of some of the defects of the present procedures the hon. and learned Member's speech was a refreshing contrast to the staggeringly complacent remarks of the Secretary of State who, in his anxiety to avoid answering a single substantive point put by my hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe), gave the impression that everything in the garden was rosy for industrial tribunals. This is far from being the case.
If I were asked to design a statue to symbolise industrial tribunals that was comparable with the blind figure of Justice with sword and scales on the Old Bailey, I would suggest the image of that mythical beast, the centaur, with its equine hind quarters being represented by the traditional trade union cart-horse and its face being that of a litigious barrack-room lawyer in full flow. That represents the worst of both worlds. In many ways these tribunals are getting the worst of both worlds.
In trivial cases the employer does not get fair treatment because of exorbitant costs in time and money defending himself against what often turns out to be groundless complaints—and were from the start. In serious cases the employee is at an unfair disadvantage, because he finds himself up against barristers and solicitors, while he is unable to get any kind of legal or union representation. That is because of the law that denies workers any form of legal aid when appearing before industrial tribunals. It is upon this aspect of industrial tribunals that I concentrate my remarks.
I have appeared at an industrial tribunal on behalf of one of my constituents who was claiming unfair dismissal from his job. That is an unusual rôle for an MP to play and I was very

reluctant to assume it. But I was literally the only person to whom this man could turn. Mr. Ken Edwards of Broadstairs came to my surgery and told me that I was his last hope. He had been dismissed after four and a half years' employment with a local industrial company. He was a good worker earning £80 per week as a skilled panel wire-man. The sole reason for his dismissal was that he declined on grounds of conscience to join a union when there was a closed shop. After conciliation attempts with ACAS and negotiations with the unions, Mr. Edwards wanted to go before an industrial tribunal, and he did so.
The first thing to be said about industrial tribunals is that the delay surrounding the hearing of cases is often intolerable. Mr. Edwards was dismissed in March this year. A decision on his case will be reached finally on the second day of the hearing—28th November. That is nine and a half months after his dismissal. Not all this time has been wasted because of delays by the industrial tribunal itself, but a very substantial proportion of that period resulted from the log-jam of cases before the Ashford tribunal. This is true of other tribunals up and down the country. It causes very grave financial hardship to a man who was earning £80 per week when he was employed if he has to wait nine months when all he is getting is £30 a week on the dole.
The second feature that I noticed about the tribunal procedures was the fact that the legal technicalities could be very baffling indeed. Immediately the case of my constituent began there were complex references to case law, precedents, the construction of the statute and objections to alternative pleas. There was a lot of difficult and technical cross-examination of witnesses, particularly relating to the implications of points in the closed-shop agreement, which is an immensely complicated document.
I pay tribute to the scrupulous fairness of the tribunal and its chairman and the amicable atmosphere that is created. Nevertheless, the Secretary of State is right to describe industrial tribunals as labour courts. My constituent was at a grave disadvantage having me to represent him, but he would have been at a far greater disadvantage had he had no one at all. The unions were there with


solicitors and the employers were there with solicitors and barristers, but who is there to stick up for the small man or the individual, particularly in instances where there is a bona fide case?
Why is legal aid not available? The present Solicitor-General was a great champion of legal aid being made available before he took office. The £25 green form scheme is no use as it does not cover representation in front of the tribunal. The Lord Chancellor has the power to prescribe legal aid in some cases. The Richard White Report on the need for legal services has been on the Lord Chancellor's desk for nearly two and a half years and obviously it needs looking at, because there is an injustice here which needs to be remedied in cases where industrial tribunals themselves or ACAS believe that the case is serious, bona fide or involves points of law.
The third point I make is that greater powers are needed by the tribunal to sift the wheat from the chaff. If an employee insists on proceeding with a case against the advice of ACAS or the tribunal, he should pay the costs or a proportion of them. It is interesting to note that cases in courts of civil law are not so frequent, because there is some form of preliminary sifting. This is necessary in the industrial tribunal system, because it would get rid of much of the present expensive time wasting.
I am worried that no appeal appears possible in respect of amounts awarded by tribunals. People do not know how to claim an adjournment to claim greater loss or damage.
Furthermore, it is wrong that the TUC should be the only body to appoint employee representatives. That is unfair to men in cases involving closed shops. The constituent to whom I referred was worried about this factor. He thought that, because he was not a member of a union, the TUC representative on the tribunal would be biased against him. It is also unfair to anybody in a non-TUC affiliated union who appears before such a tribunal.
Tribunals should have power to make unions as well as employers share the costs and compensation if a case goes against a union, particularly in a closed shop situation. If the union has been

predominantly responsible for such a situation, why should it be the employer alone who has to pay the damages, compensation and costs of the tribunal?
If the present trends continue, there is a real danger that industrial tribunals will fall into disrepute in the same way as the ecclesiastical courts fell into disfavour in the Middle Ages. The benefit of trade union will be as pejorative a phrase as the benefit of clergy. The system needs overhauling—and soon.

5.52 p.m.

Dr. Oonagh McDonald: I shall try to keep my remarks brief because I know that the Chair hopes to call as many hon. Members as possible.
I wish to draw attention to one or two matters of concern in the conduct of industrial tribunals. They are quite different from the matters of concern which have been mentioned by Conservative Members. They have repeatedly referred to the anxieties caused to employers by the existence of industrial tribunals, and to the costs of compensation. Only towards the end of his speech did the hon. Member for Brentford and Isleworth (Mr. Hayhoe) mention that the median figure of settlement is only £355—well below some of the frightening figures quoted in the national Press. Many Conservative Members give the impression that employers should fear industrial tribunals, especially in cases of unfair dismissal, but last year 11,500 of such cases were judged in favour of employers.
I am concerned about the conduct of industrial tribunals, regarding decisions made on the Equal Pay and the Sex Discrimination Acts. Last year there were about 1,700 such applications. Of those 709 were heard by the tribunals, 213 of them were judged in favour of the applicant, and 347–49 per cent. of those heard by tribunals—were dismissed on the ground that women were not doing the same or broadly similar work as men, or work rated as equivalent to men's work. A total of 78 such cases were dismissed on the ground that there was a material difference between the man's work and the woman's work other than on the ground of sex.
So far the equal pay decisions have not been favourably received by the trade union movement or the Equal Opportunities Commission. There may be


reasons for this, partly arising out of the equal pay legislation, which I do not propose to discuss in detail now. Those reasons arise partly from the procedure adopted, in that the Equal Pay Act is the only item of industrial legislation affecting the rights of an individual within the scope of industrial tribunals which gives an employer a right to make an application. It does not similarly give the union a right to submit a claim to an industrial tribunal on behalf of a member or group of members. The view taken at this year's TUC women's conference was that the Act should be amended to give the unions this right. I believe that there should be further consultation with the unions on this point.
Reference has already been made to the Trico case which an employer took before an industrial tribunal. This in no way advanced industrial relations in that company, and did not lead to an immediate settlement of the dispute. Instead, it led merely to a long strike. If unions had the right to bring forward cases on behalf of an individual member or group of members, I feel that this would strengthen the functions of industrial tribunals.
If the unions had the right to take such action, they could perhaps ensure that any decision made on behalf of a woman pleading her case for equal pay who was successful in so doing before an industrial tribunal was made to apply to other employees in the company or institution who were in a similar situation. In this way the decisions of the tribunal would be more effective and perhaps lead to a reduction in a number of such cases brought before industrial tribunals. If only one woman were given a judgment in her favour, others in similar situations could fight the case before a tribunal.
When equal pay matters are under consideration, the cases go first to ACAS and they are then perhaps forwarded to an industrial tribunal, but often when this occurs the union is not informed. That union may have members in the company and those members may be equally affected by the case brought by an individual before the tribunal. If these procedures were examined in consultation with the unions, in the coming years better judgments on equal pay matters—and, to a lesser extent, in matters of sex

discrimination—may well be made than have been made in the past.
There has been considerable confusion in a number of judgments from industrial tribunals on the subject of sex discrimination. It is obvious that members of such tribunals have not understood the purpose of the Equal Pay Act. They have not understood what is meant by "material differences" or "differences of practical importance" relating to jobs carried out by men and women. The Department of Employment has taken some steps to clear the confusion, but still has a long way to go to ensure that laymen properly understand equal pay legislation. This is important, because if a case fails simply because industrial tribunal members have not understood the complexities of cases under consideration a woman may lose out. She may not take the case further because she is discouraged from so doing, and will lose in terms of pay. Furthermore, other employees in the same company or institution may be discouraged from trying to improve their conditions by seeking to ensure that they are covered by the equal pay provisions.
Certainly the unions are concerned about the differences of practical importance between the jobs of men and women as applied to the equal pay legislation. It appears that this matter has not always been properly used or understood in these cases. This process has discriminated against women who have brought cases on equal pay before industrial tribunals. Such cases are often well publicised in the Press and judgments often go against the women who bring them. This has the effect of discouraging other women to bring similar cases, and I believe that if this continues the industrial tribunals may fall into disrepute.
It has been suggested rightly that industrial tribunals would deal with issues in a much better fashion if more women served on them. The Department and my right hon. Friend the Secretary of State for Employment have expressed concern on that score time and again. It has been argued in the past that insisting that the lay members were sponsored by the CBI or the TUC would reduce the number of women serving on industrial tribunals, but this does not seem to have been the case. There has been a slight drop in the number of women serving on


industrial tribunals. There are now 487 compared with 494 last year.
I believe that sponsorship is irrelevant. What would be relevant is a concerted campaign by the Department of Employment to encourage more women to allow themselves to be nominated by the TUC or the CBI. The TUC should have plenty of women to choose from, since one-third of the membership of the trade unions now consists of women. These women should be positively encouraged to go forward. Perhaps the Department could also consider deliberately nominating more of the women put forward by the TUC and CBI to ensure that a greater number of women served on industrial tribunals. We shall not get very far simply by expressing anxiety. We shall secure a better position for women only by positive and constructive action, not by sighing and uttering regrets at the lack of women on these tribunals.
Another area of concern is the tendency for industrial tribunals to become more legalistic and for there to be increasing representation by lawyers. Opposition Members have bemoaned time and again the costs to employers. I point out to Opposition Members that there is now an insurance scheme costing £8 per employee which enables employers to insure against the cost of compensation and the costs of legal representation and also provides them with an advisory service. Perhaps the fact that the premium is as low as £8 shows that the insurance company involved regards this as a low risk.
For the employee there is access to legal advice up to a value of only £25. There is compensation, but with a median figure of £355 in unfair dismissal cases it is small. If the employee is not reinstated, that means the loss of his job and all that that implies—perhaps a long wait during a period of high unemployment before obtaining another job, perhaps a change of skills and a change of life style. The loss of a job is extremely serious, and a couple of hundred pounds does not seem adequate compensation.
The increasing introduction of lawyers into industrial tribunals suggests that the tribunals have departed from what was originally intended. I remember my right hon. Friend the Member for Blackburn

(Mrs. Castle) talking about the Government's proposals to introduce legislation on sex discrimination. She explained that the Government were planning to use, not the courts, but the industrial tribunals, because they were more informal, less intimidating and much less expensive. She said that taking such cases before industrial tribunals would mean that we would not further line the already well-lined pockets of lawyers.
That statement seems to fall rather flat now. The whole concept of the industrial tribunal seems to be changing. It seems to be becoming yet another court rather than what it should be—a place for an informal discussion before experienced lay people who have knowledge of industry and employment and who can form a judgment about the reasonableness of decisions already made by employers, which it is their duty to assess.
There must be even more cause for concern over some of the decisions of the Employment Appeal Tribunal in the past few years. I refer to the cases of Vickers v. Smith in 1977, Ferodo Ltd.v. Barnes in 1976, and Trust Houses Forte Leisure Ltd. v. Aquila in 1976. I quote from the judgment in the case of Ferodo v. Barnes in the Employment Appeal Tribunal, which will serve as a basis for one or two points that I wish to make:
What should be done, in a case like this, is for the evidence to be given, as it was in this case, and then for the Industrial Tribunal to ask Itself, 'Now, in the given circumstances of this case, does the evidence satisfy us that the employer had reasonable grounds for taking the action which he did? '
What should be discussed by the industrial tribunal is not whether the employer thought that he had reasonable grounds. Very often he will think that, and sometimes, if not often, he will think it sincerely. What the industrial tribunal should be considering is whether that is a reasonable way for the employer to behave. One of the three cases that I mentioned concerned a redundancy. A volunteer for redundancy was overlooked and a person who did not wish to be made redundant was made redundant. That is contrary to the reasonable practice of a good employer who will take a willing volunteer for redundancy.
In the case of Ferodo v. Barnes a particular offence was alleged against an employee. The industrial tribunal, whose


decision was rejected by the Employment Appeal Tribunal, considered the question whether the employee was guilty of the offence. Here we have a difficult problem, which I shall illustrate by referring to a constituent of mine. I ask my right hon. Friend the Secretary of State to consider the questions raised by such cases.
My constituent was accused of theft. His case went before an industrial tribunal, which found that the employer had listened to his own security officers and had carried out the correct procedures, and therefore decided that the employer was justified in dismissing my constituent. My constituent was never brought to court and tried, although his claim for unfair dismissal was not upheld. The tribunal decided that he had been rightly dismissed.
The trouble is that it now appears as if the man were guilty of theft, although he has never been brought before the courts and has never been charged by the company concerned. He appears to be guilty because his unfair dismissal claim was rejected. His problem was that he was unable to find similar employment at a similar level of skill. After a long period of unemployment he obtained another job in a different industry at a different level of skill and lower pay.
If this kind of decision is to be made by an industrial tribunal and upheld by the Employment Appeal Tribunal, as it was in the case in Ferodo v. Barnes, we have difficulties. A man will be said to have been fairly dismissed because he is thought to be guilty of a certain offence, but he will not have been found guilty by the courts. However, in the eyes of other employers in the neighbourhood he will be thought to be guilty. His reputation will have gone, as will his opportunity of employment in a similar sphere.
Serious questions are posed by the principles that seem to be emerging from the Employment Appeal Tribunal, which is upholding managerial prerogative to an extent which is not generally acceptable today. Problems are also caused by an unfair dismissal which seems to imply guilt of an offence with which a man is never charged.

Mr. Deputy Speaker: There are still four hon. Members wishing to speak in the 25 minutes that remain. I hope that they will try to co-operate. I am sorry

that the hon. Member for Thurrock (Dr. McDonald) took longer than any other Back Bencher, although she began by saying that she would be brief.

6.9 p.m.

Mr. Fred Silvester: The reasons for initiating this debate should not be misunderstood by the Secretary of State. I am sorry that he took such umbrage at our raising this issue and cast aspersions on our purpose.
The Secretary of State should understand that my experience is not uncommon. I have not sought representations about industrial tribunals and the way they have worked, or about the way in which the Employment Protection Act has worked, but I have received representations from all sorts of businesses and personnel managers who are as well up as the right hon. Gentleman in the best industrial practices and who are as keen as he is to see the tribunals operate. I have received representations from small and large companies. This is a spontaneous desire for reform and questioning, and it would be foolish of us not to take note of it.
Some of the criticisms undoubtedly go to the heart of the Employment Protection Act as well as the procedures of the courts, and we should not balk if the Secretary of State's inquiry shows the same results. He should look at those results justly and sensibly. When he announced the inquiry, he said that it was Government policy that no change should be made in relation to the six-month rule or the size of the companies involved. To make such decisions before the results of the inquiry have been received seems to be rather foolish.
During Question Time last week I quoted to the Secretary of State what had been said by the Chancellor of the Duchy of Lancaster, who does not entirely agree with the right hon. Gentleman. I quoted the words of the Chancellor of the Duchy of Lancaster then and I want to quote more now. The quote comes from theManchester Evening News, which is probably not the Secretary of State's daily reading. The report said:
He"—
that is, the Chancellor of the Duchy of Lancaster—
admits that he has no intention of making the employees of small businessmen the ' second class citizens' they once were. But he wonders


whether anything can be done about the application to smaller businesses of the Employment Protection Act.
This Act was passed to give security of employment to workers. But it threatens the once-essential flexibility of small businesses. If a small employer with half a dozen employees is offered a big contract, requiring ten more workers, he once would have jumped at it. with the Employment Protection Act in operation, he might now pass up the chance, fearing heavy redundancy payments.
Mr. Lever fears that this may be having a bad impact on the necessary mopping up of unemployment. 'Flexibility of employment is in jeopardy,' he admitted.
This may be one of the Acts in which special exemptions may have to be given to smaller businessmen.
That is not a wicked evil Tory employer speaking but a member of the Secretary of State's own Government It is reasonable that we should raise these questions.
I now want to refer to a point which has already been made by a number of hon. Members namely that the whole thing is becoming too legalistic. I have some sympathy for that view, but we must remember that it is inevitable. It is no good sitting here saying that industrial tribunals are not behaving as we should wish them to do. The hon. Member for Thurrock (Dr. McDonald) said that it would be nice if the tribunals were staffed by those who were versed in industry. However, the tribunals have to go by precedent, and as soon as there are precedents and an appeal tribunal one enters the whole court system. It is no use complaining that solicitors and counsel are employed, because any self-respecting large business will employ those with the necessary skills to do the job and not send its personnel manager. That is an inevitable consequence. However, it is right that we should raise this matter.
There are other fundamental points that I should like to make. There should be some greater form of sifting of cases. The hon. and learned Member for Leicester, West (Mr. Janner), who writes and speaks learnedly on these matters, dismissed the fact that 67 per cent. of claims were unsuccessful in the courts. That is an amazing figure. Even if one makes every possible allowance for the fact that many employees are net represented or are not articulate, this

still means that, after there has been some sifting and after all the piddling little cases and the matters have been dealt with by ACAS, when cases reach the tribunals nearly 70 per cent. are thrown out. That indicates that we are not providing an adequate sifting operation.
I intend to be brief so that my right hon. Friend the Member for Crosby (Mr. Page) will have an opportunity to speak. I hope that some of the suggestions that have been made will be taken up.
We are developing what people call a labour court. It is not that. It is a curious thing in that it is a court plus a statutory obligation on the part of ACAS. There are probably other courts that have conciliation officers attached to them by law, but I do not know of them. However, here we have the makings of a sifting system. I hope that it will be possible for the Government to find some way of using ACAS conciliation officers more effectively, perhaps by strengthening their powers, so that those who insist on proceeding with cases that are regarded by the conciliation officers—perhaps because of precedent or for other reasons—as being too small to warrant the time involved, unlikely to succeed or frivolous, might be liable to pay a penalty should they proceed and subsequently lose. That is a possibility worth considering.

6.15 p.m.

Mr. John Watkinson: I am sure that all my right hon. and hon. Friends would be prepared to accept criticisms of the workings of industrial tribunals, but we are not prepared to accept a rejection of the fundamental philosophy that underlies the whole tribunal system. The Opposition spokesman said at first that his party defended the philosophy in principle, but by the end of his speech he was virtually implying that there are so many faults that the Tories can hardly go along with the system. I understood that many of my hon. Friends received the same impression.
We should stand up and say unequivocally that the creation of industrial tribunals and the unfair dismissals procedure has been a fundamental advance of rights in this country. If one considers the development of English law,


it is extraordinary to see that over the centuries there has been a development of protection of property rights. It is amazing that we have had to wait until the latter part of the twentieth century for statutes to be brought forward protecting the rights of men and women in their jobs.
The most fundamental aspect of a person's life is what he does, where he does it and the relationship between him and his employer. The philosophy that underlies our approach is the need to establish basic rights for both parties. In law books one can still read sections entitled "Master and Servant". That is exactly the attitude that we should seek to remove.
I have appeared before tribunals as counsel. It is quite apparent that the rôle and the significance of the chairman of a tribunal is crucial, and it is therefore incumbent upon the House to ensure that both chairman and lay members are as well trained as possible. This has already been pointed out by some hon. Members.
This criticism extends to the whole of the quasi-judicial framework and judiciary. Training at these levels is not adequate. I entirely agree that we need to ensure that there are more women on industrial tribunals. My hon. Friend the Member for Thurrock (Dr. McDonald) gave us the figures and it is clear that there is an imbalance and that more women should be represented there.
I agree that informality is important. It has certainly been my experience in appearing before industrial tribunals that they are much more informal than other courts, and it is vital that this should be so. As a lawyer I find the formality that exists within our courts appalling. The average person does not have the foggiest idea what is going on most of the time. I therefore welcome this informality in industrial tribunals, and I want to see it preserved. However, I doubt whether it would be undermined by an extension of representation.
I should like to see the courts kept informal with just the employer and the employee, with possibly a friend or a trade union official to assist, sorting out the cases and seeking the justice of the matter. Unfortunately, as soon as one has to deal with precedents, difficulties

appear, and I have been involved in cases that were highly complex and in which it would have been impossible for an ordinary employee to argue his case. It is difficult to argue a case concisely and when an individual attempts to do so there is often much longer delay and much greater confusion.
Firms now employ solicitors and bring in counsel and trade unions are relying to a much greater extent on specialists within their own areas. A trade union official in my area told me that in Southampton the trade unions are appointing a full-time official whose sole job will be to deal with industrial tribunals and unfair dismissal cases.
There is no escaping the fact that as these tribunals develop and if we want to ensure rights within these tribunals—which must be the fundamental obligation of the House—we may have to take upon ourselves the duty to supply funds in those cases where a person cannot obtain representation. This may mean an extension of legal aid. If this were done, it would cover the point made by the hon. Member for Manchester, Withington (Mr. Silvester), because the legal aid system would act as a sieve and would weed out cases that should not be brought before the tribunals.
There are sometimes settlements at the door, but one does not make a settlement at the door unless one thinks that the case will be lost or there is an area of doubt in one's mind. With a cast-iron case, one goes into court and wins it. I am all for settlements at the door, but I must point out that if that happens, most of the costs of a lawyer have already been incurred.
There are circumstances in which an order should be made for the costs in some cases to be payable from public funds. It is rare for costs to be awarded against a party. I do not believe that the definition of "frivolous or vexatious" is sufficiently wide. Very few cases fall within those narrow limitations. There may be cases where the tribunal feels that, in the circumstances, the employer or the employee should not have to bear the costs, and there should be scope for some sort of order allowing the costs to be met from public funds, as happens in the rest of the court system.
I hope that we all agree that a significant advance has been made in the


provisions of the law of this land by extending rights in industrial tribunals Let us improve that system; let us not go back on it or remove it.

6.24 p.m.

Mr. Graham Page: I sincerely apologise for not being here for the opening speeches. It is entirely the Secretary of State's fault. He left me the legacy of the chairmanship of a Select Committee, on which he served so honourably, and, unfortunately, we had a meeting of the Committee this afternoon.
In a recent study on Merseyside of the size of firms it was discovered that the number of small businesses had decreased enormously over past years and was decreasing rapidly even in the past 12 months. One naturally tried to find out why. One of the reasons—I do not say that it was the chief reason, although it came high up the list—was the terror of the small business man that he would not be able to get rid of an employee he did not like without being dragged before the industrial tribunal. There is that fear among the small business men that they will be put to great expense if they happen to think that an employee is not worth what he is being paid and they wish to get rid of him.
As long ago as 1957 the Franks Committee said that what a tribunal needed was:
a clear procedure which enables parties to know their rights, to present their case fully and to know the case which they have to meet.
The Franks Committee went on:
What is needed is that the citizen should receive in good time beforehand a document setting out the main points of the opposing case.
That is not happening in unfair dismissal cases before industrial tribunals. I declare my interest as one who has acted for both sides before tribunals.
What happens is that the employee goes to the tribunal and gets form IT 1—the originating application—on which he is supposed to set out the grounds of his claim. He often puts only "I have been unfairly dismissed". This goes before the secretary of the tribunal who has the power to tell the applicant that, in his opinion, the case has not been properly stated and to ask whether the applicant wishes nevertheless to proceed.

He has no power to tell the applicant to take his application away. If the applicant says that he wants to go on, the secretary has no power to go to the tribunal and ask whether it believes that the case is within its jurisdiction. The case has to be heard.
However bad the case may be and however far outside the jurisdicition of the tribunal, the employer has to appear and answer the case. This is a very great burden on the small business man. It is all right for the big boys who go along with counsel, solicitors and so on, but for the small contractor employing, say, 10 or 12 people, it is a very great burden to have to spend a day before a court and, perhaps, be involved in the expense of taking legal representation with him.
These problems could be relieved if at the outset the claim were properly stated and if, when claims were not properly stated, the secretary could take them before a member of the tribunal,ex parte, and say that this case had not been presented well enough. If the applicant did not then state his case fully, the tribunal should be able to throw it out. Unless the applicant states his case so that his opponent knows exactly what the case is, the tribunal should be able to throw it out.
There is also the power for the tribunal to alter the nature of a case while it is being heard. Frequently a claim is made for unfair dismissal but, as the employee explains the facts, the tribunal decides that it is not an unfair dismissal case, but a redundancy claim. Time and again tribunals have said, during the hearing, that they would deal with a case on the basis that it was a redundancy claim. The unfortunate employer arrives prepared to answer a claim for unfair dismissal and is faced with a claim for redundancy payment.
There should be an opportunity for the employee to state his case fully before the employer is called upon to answer it, and if a case changes in the course of a hearing, there should be an adjournment so that the employee's case may be properly stated to the employer. This could be done if legal aid were extended.
It may not be necessary to have legal aid representation at the tribunal, but to draw up a statement of the employee's


case for the legal advice fee of £25 is expecting a legal adviser to work a miracle for that small sum. The extension of legal aid would solve the problem. Alternatively, extended legal advice might solve the problem without extending legal aid to the hearing.
In some way we must meet the position in which the small business man is faced with all the expense. For instance there is the time that he is away from his business to face what may turn out to be a bad case, or to face a case that lasts very much longer than expected because it has not been properly stated at the outset. No doubt such a case would be shorter if there was a proper statement of the facts on the originating application at the outset.
I am interested in the statement that there might be exemptions from this process before the tribunal hearing and I am glad that there is to be an inquiry into tribunal proceedings. If the inquiry is seriously to consider the position of the small business man who is faced with a claim before a tribunal, I hope that there will be some way found of exempting him from the burden that is now placed on so many. The result is that son-le small business men are not prepared to continue the responsibilities of running small businesses and would rather be employees themselves. That is a tragedy. Certainly it is an attitude that is found among contractors.
I hope that from the inquiry we shall have some reform of the procedure of commencing these claims and some form of exemption for the smaller business man when he has to face the tribunal.

6.32 p.m.

Mr. James Prior: My right hon. Friend the Member for Crosby (Mr. Page) has raised an important point in taking up the remarks of the hon. and learned Member for Leicester, West (Mr. Janner) about originating applications. My right hon. Friend may think that the Statutory Instrument is one that can be understood by the non-legal mind, but my view is that it requires a legal mind and that the average worker would be very much put off by such a document. Unless there is considerable reform, I do not see how anyone can go to an industrial tribunal without being represented by a lawyer.
I believe that the whole debate has shown that the Opposition were right to select this subject for debate. It has been debated in a quiet and responsible manner. There will be no Division at the end of the debate. I willingly confirm for the hon. Member for Gloucestershire, West (Mr. Watkinson) that there has never been any question of disputing the relevance of industrial tribunals or the unfair dismissal concept. As my hon. Friend the Member for Brantford and Isleworth (Mr. Hayhoe) said it was a Conservative Government who introduced the whole concept of the industrial tribunal and unfair dismissal in the Industrial Relations Act 1971. It would be unlikely that we should now seek to undermine that which we set up, for which we have not had the credit that we should have enjoyed.
What we have been concerned about today and for some while is the way in which the tribunals are operating and the climate of confidence that has been created by the Employment Protection Act and the unfair dismissal provisions. We are concerned about the effect that this legislation could have on unemployment.
Whatever else we may do, and however much we may wish to protect the rights of the individual, we are not doing a service to workers generally if we do anything or say anything that causes the level of unemployment to rise. When the Secretary of State starts to ask us whether we think that six months is the right interval before the unfair dismissal provisions operate or whether we should have some other period, I must remind him that in Committee he was at one time committed to 52 weeks. He thought that that period was right, and not six months.
We are not doing any disservice to the worker—we may be doing him a good turn by posing the question—by asking whether six months is not too short a period. As my hon. Friend the Member for Kidderminster (Mr. Bulmer) has said to me on a number of occasions the question is especially relevant when we consider the position of young workers. An employer may be willing to take on a mature individual in the knowledge that six months is long enough to assess him, but he may not feel anything like so certain when he takes on


a young person. That tends to militate against the employment of young people.
I am by no means certain that six months is the right period. I think that the length of the period may need revision. There should be a thorough inquiry to decide whether six months is right.

Mr. Greville Janner: It is too long.

Mr. Prior: The hon. and learned Member for Leicester, West obviously wants to create further unemployment. At least, there should be a proper inquiry. All that the Opposition have said is that there should be a proper review. Let us ascertain the facts and act accordingly. It ill becomes the Secretary of State to ask whether we want to go back to two years, for example, when he thought that 52 weeks was right when the Bill was being discussed in Committee.

Mr. Kenneth Lewis: I have made inquiries, as have many of my hon. Friends, and in my judgment we do not need a Government inquiry. In my view, the period should be 12 months. If my hon. Friend suggests that there should be an inquiry, I hope that it will be a short one, otherwise there will be an opportunity for the Government, or any other Government, to avoid making a decision. We need to go back to 12 months now.

Mr. Prior: My hon. Friend gives us important information. It is the sort of information that I have been getting from many other sources. However, I prefer not to have the sort of anecdotal information with which I sometimes get landed. I prefer to have factual information. I agree that the view is prevalent, especially among small industries, that six months is not enough.
When my hon. Friend the Member for Manchester, Withington (Mr. Silvester) quotes from theManchester Evening News the views of the Chancellor of the Duchy of Lancaster, it appears that the right hon. Gentleman does not agree with the Government's policy. The right hon. Gentleman does not often agree with anything that the Government do, but he does not agree with the Government in respect of the Employment Protection Act. Generally the right hon. Gentleman talks

good sense, and I have no doubt that he is talking good sense when addressing himself to these matters.
It is not good enough for the Secretary of State to spend a long while attacking us and defending every dot and comma of the Employment Protection Act, saying that the Government have no intention of making any changes to it, only to announce that already the Government have given fresh instructions to the tribunals and that an inquiry is taking place to ascertain what else is necessary. That is a complete contradiction and turnabout.
The right hon. Gentleman made no mention of the composition of tribunals. I hope he will read what was said by his hon. Friend the Member for Thurrock (Dr. McDonald). There are not enough women serving on the tribunals. Action needs to be taken in that respect. The right hon. Gentleman made no reference to other organisations representing employees apart from the TUC. If we want to build up confidence in the industrial tribunals, they must be fair and they must be seen to be fair. There is certainly room for other employee representatives besides those who represent the TUC. It does not do the TUC any good to have a total monopoly in such cases.
My hon. Friend the Member for Thanet, East (Mr. Aitken) dealt with a number of important points in an extremely good speech. He was right to draw attention to the fact that in trivial cases the employer does not always get justice while in serious cases the employee is very often at a disadvantage. He was right to suggest that we need a much better sifting mechanism. That point was also made by my right hon. Friend the Member for Crosby. A preliminary sifting would do much to cut down the number of vexatious cases that are coming forward.
The fact that 67 per cent. of cases that come forward fail is an indication that the system is not working properly. We have to add to that the number of cases which are settled by conciliation. In some cases they are settled by the conciliation officer saying to the employer "This will cost you a couple of hundred quid in costs, so you had better settle for a couple of weeks' pay and be done with


it, because it will be cheap at the price". That is not good for the tribunal or for management.
We talk a great deal in terms of the employer and the employee. Very often in these cases the employer is a manager who might in other circumstances have a case of unfair dismissal to bring against some other manager. Therefore managers, by the nature of their job, bend over backwards to be fair. This is particularly true of personnel management, because it is not in the interests of those managers to be other than fair.
We are constantly undermining the authority of management. There is nothing worse for management or for the rest of the workforce than to see someone who is acknowledged to have behaved badly and who has been dismissed go to a tribunal and have his case upheld by it. If anything is lacking in Britain at present, it is the authority of management to manage. We need some discipline in the way we conduct our industrial relations.
We on the Conservative Benches wish to be fair in assessing the operation of industrial tribunals. There are a number of glaring examples which are undermining the confidence that employers or management have in the way these tribunals operate. As my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) has said, there is a widely held view that a dismissed employee has nothing to lose and might as well take his case to the industrial tribunal. That is not correct but it is undoubtedly thought to be correct by a great many people.
What we are trying to do—and we shall go on trying—is to draw attention to the effects of Government legislation. We all know that in the past few years there has been a spate of employment legislation. The Secretary of State must get this thrown at him day after day. If he does not, he is not seeing as many industrialists as I am. They tell me that it is not only the quality of the legislalation but the sheer volume of it that is undermining confidence in management. Our competitive position as a nation and our present unemployment figures do not allow us any room either for complacency in industrial relations or for extravagance in legislation.
This debate, held in a quiet and sensible atmosphere, will have drawn attention to some of the problems facing people in industry. We hope that the Government will take the advice of the House of Commons. Everyone who has spoken has admitted that the system does not work well at the moment and is in need of review and improvement. If nothing comes out of this debate other than an agreement by the Government to look quickly at what is happening and to make the sort of changes that my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) has suggested, we shall have achieved something for industry and possibly for employment prospects—something that we would otherwise have been unlikely to obtain from the present Government.

6.45 p.m.

The Minister of State, Department of Employment (Mr. Harold Walker): I agree with the right hon. Member for Lowestoft (Mr. Prior) that we have had an agreeable and constructive debate. I must reproach the hon. Member for Manchester, Withington (Mr. Silvester) for part of his speech. My right hon. Friend welcomed the fact that we were debating industrial tribunals because it gives us the opportunity to look at matters which are properly a cause for concern. While I cannot accept some of the points that have been made, some of the matters which have been discussed certainly deserve consideration.
I assure the House that if I am unable now to deal with the matters which have been raised during the debate they will, nevertheless, be considered carefully. There are some issues to which we must give careful consideration.
Before dealing with specific points, I wish to make two general criticisms of the speech by the hon. Member for Brent-ford and Isleworth (Mr. Hayhoe). Like others of his hon. Friends, while he understandably devoted a good deal of his speech to reflecting employers' criticisms of tribunals and employment legislation, he uttered hardly a word of sympathy and understanding for the plight of the dismissed worker. Equally, he completely ignored, as did hon. Members on both sides of the House, the industrial relations benefits which flow from this system. The inconvenience and difficulty


which might arise for employers from the introduction of the statutory provisions that have been attacked this afternoon must be set aside in favour of such benefits.
At the centre of the debate has been the issue of the administration of the unfair dismissal provisions and the rôle of industrial tribunals. Since the introduction of statutory provisions in 1971, there has been a steady decline in the number of stoppages as a result of alleged unfair dismissal. We are entitled to expect the benefits of that to be taken into account.
A number of hon. Members have referred to the need for a sifting mechanism to ensure that the increasing number of cases being referred to the tribunals is soundly based. The House might find encouragement from the fact that the chairmen of the tribunals share the view that inadequate particulars are often given, both by applicants and by respondents. In the light of that, and certainly in the light of this debate, we must consider whether some slight amendments might be made to the rules of procedure which, without requiring the particulars to be given in all cases, would make it easier for more particulars to be requested when they are felt to be deficient. We have been thinking about this, but our thinking is not yet complete. We shall need to have discussions with the Council on Tribunals. I cannot promise early alteration, but we must be prepared to take into account and respond to the points which have been put fairly from both sides of the House.
The right hon. Member for Crosby (Mr. Page) quite fairly admitted that he had come into the debate rather late, so I will point out that one theme which has run through most of the speeches has been criticism of the growing legalism of the tribunals—the growing tendency for lawyers to be invoked, the result being that the more they are invoked as representatives of the parties the more will decision and discussion in the tribunals tend to reflect the aridities of the law rather than the good, practical common sense upon which we want them to base discussion and decision. When I hear a plea for legal aid in these cases, I must respond by asking the right hon. Gentleman and others who request such provision to re

flect on whether the very availability of legal aid would not contribute towards this growing legalism.

Mr. Graham Page: Mr. Graham Page
indicated dissent.

Mr. Walker: The right hon. Gentleman shakes his head, but it is an aspect that we have to ponder. There is in any case a limited amount of legal aid available at present, not for representation but to facilitate the preparation of cases by parties.
Another matter in which we can be helpful and positive in response is the question of training. My hon. Friend the Member for Thurrock (Dr. McDonald) appealed for more training assistance for lay members in respect of both the Equal Pay Act and the Sex Discrimination Act. I know from bitter experience that both measures are extremely complicated pieces of legislation. It may encourage my hon. Friend to know that the presidents of the tribunals are currently making plans for new members to take an expanded course, possibly of three days, which will be devoted to the sex discrimination and equal pay legislation. All members already have a two-day induction course, consisting of one day's instruction followed by a day sitting in at a tribunal.
The question of an adjournment when a party fails to appear without explanation was also raised. It was suggested that something could be learned from the Scottish practice. The president of the tribunals in England and Wales informs me that he is experimenting with the system in use in Scotland—that of checking dates with the parties before a case is set down for hearing. Where an applicant fails to appear, the chairmen are being encouraged to dispose of the case, and the president will continue to see what can be done to improve the situation. In saying what I have said, I am glad to have the reinforcement of my right hon. and learned Friend the Lord Advocate.
Quite rightly, attention has been drawn to the inadequate representation of women both on the panels and on the tribunals. The Government share that concern. They share the anxiety to increase the number of women on the panels and on the tribunals until they are representative of the proportion of women in the working population. We


have asked the nominating bodies to pay particular regard to this, to do what they can to encourage the nomination of women and to put themselves in the position of submitting the names of more women.
At present, the women's membership of the tribunals is 21·2 per cent. That is too little and an unsatisfactory situation. How we get under way the campaign that my hon. Friend the Member for Thurrock asked for I am not sure, but I am sure that she will campaign for an improvement wherever she can.
The hon. Member for Brentford and Isleworth referred to the position of independent women members, and perhaps I should touch briefly on the history of the matter. In more general terms, the hon. Member will acknowledge that the system of having two panels was the system which pertained from the inception of the tribunals in 1965 until 1971. In 1971, following the introduction of the Industrial Relations Act, the TUC withdrew its co-operation from the whole system. The then Conservative Government went beyond the two-panel system, as they were compelled to do, in order to get the necessary numbers for staffing the tribunals. Following repeal of the Industrial Relations Act we have returned to the former system, which means that we have had to rule that some of the people appointed during the hiatus between 1971 and 1974 have had to seek nomination for reappointment through appropriate sponsoring bodies.
Of the 43 independent women members serving on tribunals up to 24th October 1977, five were not suitable for reappointment because of age or other reasons, one voluntarily withdrew and 24 have now obtained sponsorship and been reappointed. We do not know whether the remaining 13 either sought or were refused sponsorship or simply did not wish to continue. We have allowed the independent members to continue until the expiry of their term.
I now want to deal with the point raised by the hon. Member for Birmingham, Edgbaston (Mrs. Knight) both in this debate and in the House last week. Following the suggestion of the hon. Member for Brentford and Isleworth, I have looked carefully atHansard to see whether there was anything for which

I should apologise. I have carefully studied the hon. Lady's words and mine, and I do not think that I have anything for which to apologise.
I am not suggesting that the hon. Member for Brentford and Isleworth was wrong—I shall study what he said—when he referred to the strictures of the chairman of the tribunal concerning the advice given by the staff of the Employment Service Agency. I asked for information about it. The only case of which we know at the moment is one in which an employer sought information from ESA staff as to whether a particular dismissal would be all right and was advised in the affirmative. The chairman subsequently passed strictures. Following that incident, we reinforced the standing instructions to the ESA staff.

Mrs. Knight: I felt that the Minister's claim that I had made a wild allegation called for an apology, bearing in mind that it was the chairman of an industrial tribunal who made the statement on the advice given. I did not think that it was a wild allegation, nor did my hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe).

Mr. Walker: I would not want the House to think me lacking in chivalry, in spite of the Sex Discrimination Act. If the hon. Lady feels that I used intemperate words in reply to what she said, I ask her forgiveness. Having said that, however, I am sure that, when the hon. Lady says that clerks in employment exchanges have been urging dismissed persons to claim and telling them that it would not cost them anything even if the claim were not proved justified, she would expect me to defend people who are not here to defend themselves. I hope that the hon. Lady is now at peace with me. It is important to get this clear.
As I was saying, we have instructed staffs of the Department's own offices and of the ESA that they must give factual information only. It is right that information should be given. People who have been dismissed often come to our offices to get information and advice on how to get redress, and it is right that we should provide such information. We tell the staffs that they must give factual information only, and they are told to issue an application form to members of the public if they think that there is


likely to be any entitlement to complain of unfair dismissal.
I think it right that people should know of their statutory rights and that we should be under an obligation to provide such information, but there is a balance here which is sometimes rather difficult to determine.
I promised that I should try to finish my speech promptly in order not to trespass on the time for the debate which is to follow, and I promised also that I should try to deal with as many as possible of the points raised. I apologise for having dealt with but few of them, but I assure the House that we shall give careful consideration to all the suggestions made, many of which, as I have already agreed, deserve consideration.
I conclude on this note. My right hon. Friend referred in opening to the Donovan Commission's expressed belief—a belief which, I hope, is common ground among us all—that the pursuit of statutory rights, rights which Parliament has given, on behalf of workers is best done not through the courts but through procedures which are easily accessible, informal, speedy and inexpensive and which give the best possible opportunities for arriving at an amicable settlement of differences.
Although some of the arguments used in the debate today require further consideration, I am sure that none of us would wish in any way to reflect adversely on the tribunals or to diminish our wish that they should continue to seek to fulfil the spirit of the Royal Commission's words All of us recognise that the industrial tribunals and their members have a difficult and challenging task, a task demanding much in time and energy, and I hope that, in looking at our words today, they will not feel that in any quarter of the House there was a wish to criticise either the tribunals or their members. I hope that, on the contrary, they will recognise that we appreciate the contribution which they make to industrial peace and justice and will feel that our criticisms are intended to help and in no way to impede the valuable work which they do on our behalf.

Mr. Alf Bates: I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.

TRANSPORT POLICY

7.2 p.m.

Mr. Norman Fowler (Sutton Cold-field): I beg to move,
That this House condemns the Government's handling of transport policy.
I shall try to be reasonably brief as I know that many hon. Members on both sides wish to take part in the debate, and I hope that the Under-Secretary of State will agree to fairly short winding-up speeches at the close.
I should make clear at the outset that the charge we level against the Government relates to their whole period of office of almost four years and not to just one period of their administration. The charge is directed against a succession of Transport Ministers, not just the present incumbents. It certainly includes the Secretary of State, but it includes his predecessors, too, as well as colleagues in the present Government.
Moreover, although the Opposition have put down the motion, criticism of the Government's transport policy is by no means confined to this side of the House. The proceedings of the Labour Party conference are always hard to interpret, but it seems reasonably clear that most of the delegates at this year's conference would have found no difficulty in voting for our motion.
According toThe Guardian, this is what happened. The hon. Lady the Member for Eton and Slough (Miss Lestor) was in the chair. When she called the Secretary of State, he made his way to the rostrum to the accompaniment of jeers and boos. It is one thing to get the bird after one has spoken, but one can only reflect that it takes a certain amount of application to get it before saying a word. The Secretary of State then spoke, and such was the persuasive effect of his address that the hon. Member for Eton and Slough, a fair-minded lady, responded in the only way she knew how—by turning off the Secretary of State's microphone. Taking this subtle hint, the right hon. Gentleman returned to his seat, to the accompaniment of more jeers, and when the motion which sought to reject the Government's White Paper on transport policy was put to the vote it was overwhelmingly carried.
I do not wish to jump to hasty conclusions. Perhaps that was the best reception the Secretary of State has had at a Labour Party conference for years. But what is clear beyond doubt is that the Government's transport policy has been rejected by the Labour Party itself, and doubtless many hon. Members on the Government Benches will be voting with us in the Division tonight.
However, be that as it may, the Government know that they do not carry their own party in support of their transport policy, and for good reason. What has been the Government's approach? Basically, the Secretary of State's own view is that transport policy is all very difficult and there are arguments both ways. If anyone thinks that I am exaggerating, let him read the right hon. Gentleman's article inLabour Weekly of last July. The most the Secretary of State could find to say about his job was that it was a bed of nails, and he went on to say this of his policy:
It is never possible to please all of the people all of the time. In transport it is becoming difficult to please anyone in any way at all.
That is his commentary on his own policy—and who am I to argue?—but by a Freudian slip he got the quotation wrong. The actual quotation should be
you can not fool all the people all of the time".
If the right word is inserted, one at least makes sense of the right hon. Gentleman's view, which is that in transport it is becoming difficult to fool anyone in any way at all.
Yet that is precisely what the Labour Party has sought to do, because no one can reasonably reconcile what it said at the time of the last General Election with what it is saying now. In 1974 Labour promised a massive shift of freight from road to rail. The consultation document of 1976 referred to this as a pipe dream. The White Paper said that it was not a sensible long-term aim. In 1974 the Labour Party promised an integrated transport policy. The Government now reject that.
Thus, the Government have abandoned one or two of their more untenable positions, and we certainly welcome that, but the trouble is that in that rejection they have not yet found a transport policy.
The result has been stalemate—thousands upon thousands of words but precious little action. The outcome has been four wasted years in transport policy in which delay has followed delay, and nowhere has this been clearer than in the question of rural transport.
It was to help ease the specific problem of rural transport that my right hon. Friend the Member for Yeovil (Mr. Peyton), when he was Minister for Transport Industries, brought forward his Road Traffic Bill of 1973. In January 1974 the Bill had its Second Reading. Three clauses in the Bill introduced reforms in the licensing system. For example, they permitted the development of minibus services and the giving of lifts for payment. They were moderate reforms. Indeed, the major complaint of the right hon. Member for Sheffield, Park (Mr. Mulley), who led for the then Opposition on transport matters, was as follows:
We would have liked to see something more dramatic to meet the problems of public transport, especially in rural areas.
A Labour Back Bencher, the hon. Member for Glasgow, Kelvingrove (Mr. Carmichael), intervened in the debate to say that he hoped
that there will not be too many pettifogging regulations about the use of minibuses."—[Official Report, 30th January 1974; Vol. 868, c. 473–4.]
In the event, what took place? A General Election intervened and the progress of the Bill was brought to an end. When the Labour Party came to power it reintroduced the Bill, but with one exception. It left out the clauses on de-licensing. The party which a few weeks previously had talked of dramatic solutions now turned its back on all reform, while, with true irony, the Back Bencher who said that there should not be too many pettifogging regulations was the very same junior Minister who argued against the amendments to the Bill to have the delicensing proposals reinserted.
That was the history of the matter at that stage. For the next two years the Government did precisely nothing. The right hon. Member for Sheffield, Park was awoken from his transport slumbers and gave way to the hon. Member for Dudley, East (Dr. Gilbert). Eventually, in November 1975, there came a dramatic Government announcement. A committee was to be set up to consider the


problems of rural transport. That was from the party which had complained that progress on rural transport had not been sufficiently dramatic. Yet such was the priority—even at that stage—given to that committee that it took seven months for the committee to meet for the first time.
It is this that we complain about in Government policy, that delay has followed delay. Now, in 1977, the Government say that there is an urgent case for reforming the traffic licensing law. The evidence has been there for years. The fact is that the Government have ignored that evidence.
We will wait to see what is contained in the Transport Bill. The Government have suggested that their solution is that the traffic commissioners should be bound to take note of county council transport plans. Our view is that it will have to go much further than that so that it is made clear that the county councils' review should take precedence.
We in this country must be far more adventurous with new transport services. For example, there is no reason why there should not be experiments with commuter coach services, but for this to happen we must have a Department of Transport which is committed to reform. In the United States the Department of Transportation has just published a 66-page book, on innovation in public transportation. The amount of innovation carried out by the Government here could comfortably get on to the back of a postcard.

Mr. Ronald Atkins: The hon. Gentleman has mentioned that in the United States a book has been published on this matter. He complains about the Government not taking action. A fair question is, what action has occurred in the United States? I found that commuter traffic in the United States was deplored by the Americans themselves. Will the hon. Gentleman give us examples?

Mr. Fowler: The examples I would give the hon. Gentleman are in the sector between public transport and private transport, which is what essentially we are talking about—the minibus coach service, van sharing, car pools and other things which are being experimented with

in the United States. The hon. Gentleman is right about the conventional services. Where he is wrong is about the more unconventional services. What I am arguing is that we should be far more adventurous in experimenting with those more unconventional services and going forward. That is the point, and I should have thought that even this Government could grasp that.
So there is no question but that the Government have delayed and delayed. I suggest that politically the Government have deceived. The prime example here is what the Government referred to as local devolution, putting decisions down to the local level. The White Paper is thick with policies of that kind, but the question is, what is the Government's purpose? They declare that their aim is to give more responsibility to local people. The suspicion is that they are trying to pass the buck, to shift the blame for any inadequacies in transport provision.
That suspicion has been established by a letter sent by Mr. Roger Liddle, the Special Adviser to the Secretary of State, to leaders of Labour groups on county councils in England. I have a copy of the letter here. Included amongst the letters, he sent one marked "personal" to the home address of Mr. E. G. Barratt of the Buckinghamshire County Council. The only trouble with the Secretary of State's information is that Mr. Barratt is not a Labour leader but the Conservative leader of the Buckinghamshire County Council.
I think that in the interests of open government it would be right for me to publicise further the contents of this letter. I see that the Secretary of State nods in agreement. It is up to him to put the letter in the Library. If he does not, I will. The nub of the letter is in the last paragraph, because this spells out what the Secretary of State sees as the purpose of his policy and it has precious little to do with local devolution.
The letter says this:
The success of the White Paper policy will depend a great deal on the extent to which local parties' groups capitalise on the opportunities now open to them. Bill "—
that is, the Secretary of State—
has written personally to our national organisers to let them know that he would be willing to help in this by speaking at meetings during the autumn and winter.


So the success of the White Paper is measured not on how it helps local councils, even less on how it improves local transport, but on how local Labour Party groups can capitalise on the opportunities now open to them. Therefore, when the Secretary of State and his Under-Secretary turn, as they will, to attack the shire counties, the public should remember that this is part of an orchestrated campaign to discredit the councils. It has nothing to do with transport policy. It has everything to do with capitalising on what they see as political opportunities.

Mr. Ian Gow: Will my hon. Friend tell the House upon which writing paper this letter was written?

Mr. Fowler: I am grateful to my hon. Friend. The letter went out on the writing paper of the Secretary of State for Transport, and presumably it went out in the official way. Apparently neither the Secretary of State nor the Prime Minister considers there to be anything exceptional in that pursuit.
What the Secretary of State has said in the letter and what he has laid down is not a plan for transport. It is an attempt to pass the buck, and as such and as revealed in the letter it is an attempt which should be rejected with contempt. The Secretary of State stands condemned by the words of his own Special Adviser.
When it comes to the Secretary of State's major policy in this area—the shifting of financial responsibility to the local councils for railway services—it has been overwhelmingly rejected both inside and outside the railway industry. I know of no one who actually agrees with it. The plan is regarded as so absurd that even the Liberal Party has condemned it.
There is one further point I wish to put on railway policy. All too often the person who gets missed out of the railways debate is the user of the railways—the passenger or the customer with goods to move. That is why we have called for publication of the different costs of the railway services so that passengers, for example, know what those costs are—a position which, amidst some floundering around, the Under-Secretary seemed to accept last Friday.
It is because of the importance that we place on passengers that we have stressed that, as two-thirds of the costs of the railways are the costs of wages and salaries, unrealistic settlements can only push up fares further and force passengers off the railways. With the ASLEF negotiations just beginning, I hope that the Secretary of State will make his position clear on that.
It is for the same reason that we want to see strong representation for the railway user through the transport users consultative committees. On this, the Government's record deserves examination. The committees exist to receive and investigate complaints from the public, and, according to the Secretary of State for Prices and Consumer Protection, when he is making appointments of the chairmen of the area and central committees he looks for
robust and independent champions of the user".
How extraordinary it is, therefore, that systematically these jobs have gone to avowed Labour Party members both at the area level and at the national level. Let us take the chairman of the central committee—the most important chairmanship. Whom did the Government choose for the users' "robust and independent champion" there? They chose Mr. Frank Higgins, the former Labour chairman of Nottinghamshire County Council's environmental committee. He had been one of the chief authors of the Nottingham parking plan which was overwhelmingly rejected by the local users and a member of the board of one of the biggest nationalised transport providers in the country—the National Bus Company.
It is impossible to take seriously Ministers—the Secretary of State was, of course, party to that decision; indeed, for all I know he may well have suggested Mr. Higgins—who act in that way. In making these appointments rewards for the party faithful, it seems to me that the Government have devalued the work of these committees and weakened the position of transport users.
That is what the Government have done—or, more often, what they have omitted to do. What plans do they have for the future? When the Secretary of State made his statement in the House on the White Paper—I give him credit that


he does not deserve—he made no mention of the nationalisation of road haulage. The House will remember that the Secretary of State, in his way, did not allow Members to see the White Paper before he made his statement. Having seen the White Paper, we all know the reason for that.
But in the White Paper the pledge remains. There is just one line saying that it remains the Government's intention that there should be an extension of public ownership in road haulage. Let us be clear that that pledge remains. If, God forbid, a Labour Government with a majority were returned again, this pledge could be implemented.
I say this to the Liberal Party. The trouble with its policy of trusting the so-called moderates in the Labour Party is that it is not succeeding in changing policy. If the Liberals believe otherwise, they are deceiving themselves. All they are doing is to sustain a Government and a party who regard them with scarcely disguised contempt. If the Liberals support this Government, they must take the consequences of that support—and that includes policies like sustaining nationalisation of road haulage.
Thus the Government wobble towards their four-year mark. We shall have a Transport Bill which, if the Press is to be believed, will give one or two sops to the right hon. Gentleman's own side, like the majority ownership of Freightliner. Even on his Transport Bill, however, the Secretary of State has not been able to get his own way on, for example, road safety.
I am no supporter of compulsion on seat belts, but it seems to me that the compromise solution which the Government have come up with is derisory and must dismay even supporters of compulsion. For England, Wales and Scotland there will be no compulsion. For Northern Ireland there will be compulsion. Not only is that objectionable on constitutional grounds; it seems to me extraordinary to place a new burden on what must be the most overworked police force in the United Kingdom.
Of course, the fact is that the Secretary of State has been overruled in the Cabinet on the ground that compulsion would be unpopular in election year. What new goody do they unveil for our

delight? There are to be new restrictions on parking, mentioned in the White Paper but spelt out in their generally unpublicised consultation document. There are plans which include the control of office car parks, the sale of permits and measures of enforcement described in their consultation document as being plans which involve the formation of a new enforcement body, duly authorised officers, neither policemen nor traffics wardens, with powers to enter private premises. They are the plans on which the Government are consulting in pursuance of their transport policy. [Interruption.] If the hon. Member for Sunderland, South (Mr. Bagier) does not realise that this is the Government's transport policy he had better wake up, because that is exactly what it is.

Mr. Gordon A. T. Bagier: All I was looking for from the hon. Gentleman was something from the document that he has apparently published called "The Right Track". We want to know what Conservative transport policy is about.

Mr. Fowler: I have given indications of that, and it is certainly spelt out in the Conservative Party's transport document. I urge the hon. Gentleman to use his eyes and to read the motion on the Order Paper. That motion condemns the Government's transport policy, and that is what we intend to do.
My hon. Friend the Member for Ayr (Mr. Younger) will deal with a number of other issues such as roads policy and EEC regulations. [Interruption.] I am sorry that hon. Gentlemen do not like it, but they will have to keep quiet. What is the Government's record on transport policy? Basically, it can be summarised in this way. It is a record of delay and inaction. They have neither seriously tackled the problems of rural transport nor given to local authorities the support that they deserve. They have paid lip-service to the value of competition in the freight sector while remaining committed to further nationalisation. Their White Paper, in the words of the internationally respectedJournal of Transport Economics and Policy, is "a pretentious failure". And they still grope towards a policy.
Over the last four years the Government's transport policy has failed to match up to the demands of the nation. Above all, the Government have not served the interests of the users of transport—the passenger and the customer. If transport policy fails on that issue, it fails on everything. I urge the House to support the motion.

7.24 p.m.

The Secretary of State for Transport (Mr. William Rodgers): The hon. Member for Sutton Coldfield (Mr. Fowler) always shows signs of strain when he tries to work himself up into a temper. He is a very reasonable man and it is not his natural style. I think that his display of anger this evening has been a very shallow cover for a lack of anything much to say. I welcome the intervention of my hon. Friend the Member for Sunderland, South (Mr. Bagier), who rightly said that there was not one single piece of policy in what the hon. Gentleman had to say.
At the beginning of my speech I wish to say that far from the debate being an embarrassment to the Government—which is what I thought Supply Days were meant to be—the hon. Gentleman has put me in his debt. I am grateful to him and to the Opposition for allowing me a platform in Opposition time. It comes conveniently soon after the publication of the White Paper and also enables me to give the House a trailer for the transport Bill, which was mentioned in the Queen's Speech.
In the course of what I have to say about the Government's intentions I may answer some of the points that the hon. Gentleman has made, not necessarily to his satisfaction. Others will no doubt feature in the remarks of my hon. Friend the Under-Secretary when he winds up the debate.
My problem today is not of speechless anxiety in the face of a ferocious attack by the hon. Gentleman. I am full of thoughts to vouchsafe to the House but I have too little time to disclose them if hon. Members on both sides are to have a chance of joining in.
I want to make three comments about the White Paper: first, about objectives; secondly, about public expenditure; and thirdly, about the respective role of central and local government, something upon

which the hon. Member for Sutton Cold-field had certain remarks.
It is right that every Government should set objectives and judge their separate policies against them. In the simplest terms, the White Paper says that the transport policy should meet real needs by contributing to economic growth and national prosperity and by ensuring a reasonable level of personal mobility for everyone. At the same time, decisions must minimise the danger to our environment and take full account of the uncertainties of energy prospects.
These objectives sometimes conflict. I do not query that at all. I believe that the hon. Member for Sutton Coldfield would find that that was the case if he were in my place. The Government of the day must find a balance in seeking to reconcile them. But no Government should accept either the blandishments of the lobbies, and there are many, or the simplicity of present trends. Transport policy must be flexible and it must evolve.
It follows that no Government can predict what share of the national resources should go to our transport system, say, 10 or 20 years ahead. That is why the White Paper refers to an annual White Paper on roads and periodic White Papers on the development of transport policy as a whole. I hope that the House will welcome this. I am personally very anxious that the extent and quality of the debate on transport which the consultation document and the present White Paper have provoked should go on. I believe that my Department is more open-minded about these issues than ever before.

Mr. Robert Adley: The Secretary of State described his Department's policy as flexible and wanting to evolve. Can he explain why in Paragraph 145 of the White Paper, referring to the National Bus Company and the Scottish Transport Group, he says:
the decision that they should remain as national organisations will secure their role for the future."?
Is that to be flexible and evolutionary, or is the right hon. Gentleman absolutely determined that there should never be any change?

Mr. Rodgers: I am not determined that there will never be any change. That is something for the House to decide. But part of the task of the Government in the White Paper was to make decisions in order to present a degree of certainty to the industry. I am sure the House will recognise that evolution produces new circumstances and the need for change, and I think the hon. Gentleman will see the logic and reasonableness of what I have said. I have said that because no one knows what resources will be available.
For the present public expenditure on transport must remain within the figures in the public expenditure White Paper as modified by transport's share of the recent construction industry package. I regret this necessity. In the current year 1977–78 I shall have significantly less to spend than I had in 1976–77, and I cannot plan on any significant increase for the rest of the decade. But I accept the wider priorities that this implies both for other claims on public expenditure and for taxation.
Hon. Members may argue whether the priorities of the White Paper within the total of transport spending are right, although the hon. Member for Sutton Coldfield had nothing to say on this essential matter. But if hon. Members believe that we should be spending altogether more—on new motorways, road maintenance or on revenue support to keep bus and rail fares down—they must say where it is to come from. Should we cut spending on education, housing or social security? Alternatively, should we raise taxation or maintain it at its present level in order to divert resources from private consumption? This is a dilemma that cannot be fudged by those who want the Government to spend more on some element in our programme.
Let me say this about rail fares: I fully understand the burden that increases represent for those who regularly use the railways. Although the average household in this country spends less than £30 a year on rail travel, quite a few people spend as much as that every month. There is no way of shielding the traveller from inescapable increases in costs. As inflation eases, I hope that we shall experience smaller increases than we have known lately. Meanwhile, I am glad that the

British Railways Board held fares for a full calendar year without any increase. In fact, there was very little loss of passengers as a result of last January's increase. On the inter-city routes the number of passengers is increasing—I hope that the House will welcome that—despite the Board's intention that this part of the network should pay its way without a subsidy.
I recognise the special problem of commuters. But commuter services, making a heavy demand on track and rolling-stock at peak periods, continue to receive significant subsidies. We have not imposed in the White Paper a specific financial objective for the commuter services in London and the South-East and we certainly believe that commuters should have a period of years to adjust fully to such increases as may be necessary.
But for commuters as for other rail passengers there is no escape from the dilemma I have already mentioned. Without increases in fares we should have to raise revenue support. The money would come from higher rates or taxes unless it was diverted from other spending programmes. The Government have no intention of following this course and the board—anxious to operate within what its chairman calls its "contract" with the Government—does not want it either.
I do not leave out the question of productivity. The White Paper mentions that over the years there have been notable improvements. The House should recognise and applaud these. But the White Paper also says:
There must be continuing improvements in productivity and efficiency. There is no other way to secure the future of the railways
I am content to rest on that, not only for the passenger side but for rail freight.
The White Paper marks a clear and deliberate shift towards a steady level of support for public transport. In particular it spells out the need to remedy the long-term neglect of our rural areas. This intention, despite the crochety remarks of the hon. Member this evening, was warmly welcomed by both sides of the House in the debate that we held on 2nd May last. There is now an obligation upon Government to ensure that it is fulfilled. I am sure that every hon. Member who believes that there should be an


improvement in the rural situation will endorse that.
The White Paper emphasises the importance of local planning and choice. Local communities are best able to judge their particular needs and to describe how they can best be met. But this local option must be exercised within the resources available. The Government have a clear duty to lay down a framework of policy for the country as a whole.
This situation is not new. It arises annually—and I have heard no complaints about it—in the regular procedures for the distribution of transport supplementary grant, which largely stems from the highly unpopular local government reorganisation, for which we had no responsibility.

Mr. Arthur Jones: I wish to ask the Secretary of State about the responsibilities of the county councils. Is he prepared to accept a recommendation from the traffic commissioners that the National Bus Company should be required to surrender routes to private operators? I am thinking in particular of the rural areas.

Mr. Rodgers: The hon. Member raises an important point about the licensing system. I prefer not to comment on that now, because it does not arise directly from what I was saying about the local transport supplementary grant.

Mr. Arthur Jones: Certainly it does, on grounds of local accountability and responsibility.

Mr. Rodgers: I fully understand the hon. Member's concern. Perhaps the Under-Secretary of State might like to comment on that matter later.
I am dealing with a matter to which the House attaches great importance and which the hon. Member for Sutton Cold-field mentioned. He should listen carefully to what I am about to say. I shall not bother the House with all the details of the TSG settlement. It would be wrong to do so. I shall certainly not refer to individual counties, because I have yet to determine individual allocations. But, as I announced on Friday, I propose to introduce special arrangements to ensure that all support for rural bus services qualifies for TSG In

this way I shall be helping counties to implement the White Paper's clear priority for public transport. In addition, within the total sums available for capital investment, I shall give preference to those counties whose policies take proper account of the priorities in the White Paper.
I shall be significantly less generous towards those who seem indifferent to rural needs in this respect. This means that, on balance and after taking account of each county's specific needs and circumstances, shire counties that spend more on buses will have more to spend on new road schemes. Those that fail to face up to their responsibilities for public transport will have less. Total expenditure on subsidies must be within the ceiling set out in Cmnd. 6721 and in the White Paper, which means that I cannot approve unlimited allocations for revenue support. There must be fair shares of what is available. Nevertheless, there will be no excuse for any counties cutting out socially necessary rural services. If they do so, it will be their choice and not mine, and I shall take it into account when deciding on future TSG settlements.
I now want to turn to the forthcoming transport Bill. The Second Reading will be the occasion to go into detail. Many highly desirable proposals in the White Paper cannot be the subject of legislation in this Session because there is no time. The Bill can deal only with those matters that are the most urgent and worth while.
However, I think that it may help the House if I indicate broadly—I emphasise "broadly" because the time will come, when the Bill is published, to examine it in detail—what its contents are likely to be. Part of the Bill will provide for continuing Exchequer support to the passenger business of the railways as envisaged in paragraph 223 of the White Paper and part will deal with the financial reconstruction of the National Freight Corporation, as promised in paragraph 238.
Otherwise I have in mind that it should provide for the preparation of county public transport plans and for some relaxation of existing public service licensing in order to help community buses and car sharing. These proposals are an essential part of our charter for rural areas.
We propose that the responsibility for public transport plans should be placed on county councils, but that in preparing them they should work closely with their district councils and with local public transport operators. In the course of preparation there should be an opportunity for everybody—trade unions, consumer bodies, and individual users of public transport—to comment and make suggestions.
I want this to lead to clear, comprehensive plans for the public transport network which meet the needs of people in each county, backed up by firm agreements between county councils and operators for services which need revenue support.
These agreements must be for a long enough period to give operators and users a reasonable degree of security, which is particularly needed for rural services. The relaxations on bus licensing will supplement the plans and agreements by permitting a much wider range of solutions to the needs of rural areas for which the conventional bus, even with subsidy, is not the right answer. I want to remedy that neglect, and these important and urgent measures provide the means to that end.
The Bill will also include measures to deal with dangerous offences, such as the overloading and inadequate maintenance of lorries, and car parking. But perhaps this also is the moment to mention two items which it will not contain.
The White Paper made certain proposals about cost-ineffective local railway services. This was one of the two "green" areas in the White Paper—the other referred to the prospect of a little Neddy for transport—where further consultations were promised in advance of final decisions. As the House knows—this came up in Question Time last Wednesday—these consultations have not yet begun. The question of legislation at the present time cannot, therefore, arise.
Then, on parking, the White Paper set out two decisions: to give local authorities power to license privately operated public car parks, a power which the Greater London Council alone at present enjoys and to give local authorities, including the GLC, power to control private

non-residential car parking, which is known as PNR.
The hon. Member for Sutton Coldfield made great play with these proposals. He said that they were generally unpublicised, but, as he must surely remember, the proposal for PNR was raised in April 1976 in the consultation document. It is referred to in Paragraph 124 of the White Paper. There was a consultation document in July 1976 and the present consultation document was sent out on 25th August last. I do not know why the hon. Gentleman should think of it as in some way secretive. It was sent to some 500 organisations and copies have been in the Library of the House of Commons.
If I intended to conceal anything from hon. Members I certainly would not circulate the document on that scale or put it in the Library of the House. The hon. Gentleman may not like the proposals in the document, but there is no question at all but that I have been anxious to see open and free debate and have done all I can to ensure it. It just happens that some people have overlooked the import of these proposals and very late in the day—and I am sorry that the hon. Member may have neglected his duty in this respect—they are beginning to complain.

Mr. Norman Fowler: As the Secretary of State knows, his last remarks are totally untrue, since it was I who wrote to him to get the consultation document. I hope that he will therefore withdraw that remark. But why, if he is making such a play of publicising the matter, did he not release the contents of his consultation document to the Press, radio and television organisations? Would that not have been the normal way of publicising the proposals?

Mr. Rodgers: I think that I am right in saying that a number of newspapers have certainly had copies, but it has been freely available to anyone who wanted it. If the hon. Member wishes to pursue this matter, I shall be delighted. My case is powerful and he has none. The document has had a very wide circulation and if hon. Members would like copies, they can have them at any time. It is perfectly right that the House should discuss these matters. We all have a very large postbag, and I do not want to add to the


burden of it. However, these consultation documents are available and I see no reason why hon. Gentlemen should not have them if they wish.
However, in spite of all that—and here I shall be disappointing the hon. Gentleman after the fuss he has made—in the interests of a short Bill, which I hope will command widespread support in the House, I do not propose to seek to legislate at this stage on PNR. Therefore, all the energy and fury that the hon. Gentleman has been bringing to this argument have been unnecessary in terms of the immediate future.
I am not proposing to legislate on PNR, but I intend to legislate on what I call POPP; in other words to extend the powers which only the GLC has at present, to license privately operated public car parks. This power was given to the GLC by the House of Commons some years ago and this is totally consistent with the approach of local option which underlies my White Paper and which, for that matter, is contained—and I hate to advertise the hon. Gentleman's little book—in references to traffic management in "The Right Track". Proposals on this will be in the Bill when it is published.
I referred earlier to the reconstruction of the National Freight Corporation. The House has been impatient to receive our proposals. I make no complaint. I regret that it has not been possible to bring them forward sooner than the forthcoming Bill. I must say frankly to the House—drawing now, I am ashamed to say, on ministerial experience in six different Departments, on-and-off over 13 years—that matters concerning the financial structure of public sector industries are some of the most difficult with which Ministers are required to deal. These are complex areas—I am not afraid to say that—which tax us all. It is not always easy to get them right.
However, the House may wish to know now that I have decided to transfer Freightliners into the 100 per cent. ownership of British Rail. The debate about the future of Freightliners has gone on long enough. Everyone has had an opportunity to express a point of view and I have considered these most carefully. In the interest of the business it is now time to end the argument and look for a period of certainty.
I know that Sir Daniel Pettit and his Board will be saddened by my decision. The NFC has done much to rid Freightliners of its deficit and pull the company through difficult trading conditions. I pay tribute to its achievement. But, similarly, I know that Mr. Peter Parker and the British Railways Board will welcome the challenge that the ownership of Freightliners will present.
I propose the transfer because I believe that over the recent past the Freightliner services have increasingly complemented, in terms of type of service, other British Rail services for general merchandise traffic, such as "Speedlink". It makes increasing sense that the Freightliner services should be marketed by British Rail alongside its other services within its own freight marketing organisation.
The recent report of the Select Committee on Nationalised Industries recommended that Freightliners should return to British Rail.
I recognise also that the great majority of Freightliners staff regard themselves primarily as railwaymen and fully support the return to British Rail. There are practical reasons for this in terms of wider career prospects as well as sentiment.

Mr. Donald Anderson: Is my right hon. Friend aware that even if Sir Daniel Pettit is saddened, there will be a general welcome in the country, because this is essentially a rail-oriented operation, in any event? Will he comment on the timetable which he envisages for this transfer?

Mr. Rodgers: I am grateful to my hon. Friend for what he says. The timetable will depend upon the publication and progress of the Bill. I think that it is in the interests of everyone that it should be as short a transition as possible, because if, a decision having been made, we want certainty, the House should ensure that the business prospers under its new owners. But it would be rash of me at the moment to suggest a date when the Bill should receive the Royal Assent. However, I would be looking for a date about July next year, if that could be achieved.

Mr. Gow: The Secretary of State says that he will be transferring Freightliners from the NFC to British Rail. Will he


tell the House exactly what he means by that? Will it be a sale? If it is a sale, surely no parliamentary authority is required? NFC can sell it.

Mr. Rodgers: The hon. Gentleman is wrong in his reading of the statute. I do not believe for one moment that the House would tolerate a decision of this kind being made by a Minister without proper legislative authority. There is no way in which it can be transferred, and, of course, its transfer will be part of the total reconstruction of the NFC, which will be set out in detail in the Bill when it is laid before the House.
I must now seek to end my remarks, or I shall be trespassing too much on the time of hon. Members. However, there is one further point about Freightliners which is important. I shall expect the British Rail Board to be rigorous in the management of the company and ready to make any necessary changes. It will be important not only to develop existing profitable traffic but also, by effective marketing, to find more, because some unprofitable traffic may have to go. But I am confident that the board will maintain a close relationship with the NFC both in the transitional period and after.
As I said in commenting on the date for the transfer, the transfer does not promise an easy time either during the transition or thereafter, for the management or the employees of Freightliners. It provides, however, an opportunity for success in which everybody can share.
When I first heard that the Opposition had chosen to debate transport policy on a Supply Day, I was puzzled by their decision. The appearance on the Order Paper of the motion standing in the name of the right hon. Lady the Leader of the Opposition left me no wiser. I confess that in his speech the hon. Member for Sutton Coldfield confirmed me in my impression that the Opposition had made a mistake. The hon. Member was solicitous in seeking to protect me from my hon. Friends, from the Labour Party Conference and from virtually everyone else in sight. I have no need of his kindness or protection. I am happy to rest on the White Paper and the proposals for legislation that will follow.

7.53 p.m.

Mr. Peter Temple-Morris: I am very pleased at having been called to speak following the Secretary of State. This is the second time that I have followed him in our transport debates. The last occasion was when we debated rural transport. Let the right hon. Gentleman rest assured that there has been no mistake about the motion. We considered the Government's transport policy to be at fault. We consider it now, today, to be far too little and far too late.
Having said that, let me take up one or two matters that the Secretary of State has mentioned. Rural areas were discussed in our previous debate. I then gave my views to the House in some detail. However, I cannot quite stomach—this may go for some of my hon. Friends—the fact that for three years we have had nothing for rural transport, and now, suddenly, amidst a puff of smoke from the Treasury Bench, we have a charter for rural areas. It is the expression "a charter" to which I take exception, because we have a charter which has taken a great deal of time in the writing, and even now we wait breathlessly to see whether it contains anything that has not been promoted by the Opposition.
We wish to register firmly that the rural areas owe far more to Opposition Members, such as my hon. Friend the Member for Wirral (Mr. Hunt), with his minibus Bill, and my hon. Friend the Member for Sutton Coldfield (Mr. Fowler), with his amendments to the experimental areas legislation, than to the Government. All of that was due to the Opposition. I hope that the hon. Member who will shortly be speaking for the Liberal Party, the hon. Member for Truro (Mr. Penhaligon), will at least acknowledge these matters, coming, as he does, from a rural area, and supporting, as he is, a most "unrural" Government.

Mr. David Penhaligon: I thought that the hon. Gentleman had just indicated that matters were improving. Surely he would give the Liberal Party some credit for that.

Mr. Temple-Morris: I dare say that they are improving because a General Election is nigh. When the hon. Gentleman speaks in the House, it is usually to register the fact that he has made a


representation to the Secretary of State which the Secretary of State has entirely ignored. That was the hon. Gentleman's position at the last Question Time—

Mr. Penhaligon: rose—

Mr. Temple-Morris: No. I do not want to take up undue time.
It falls to me to be the first Opposition Member to react to the Secretary of State's announcement about Freightliners. I dare say that most of us—there are hon. Members present on both sides who have had this matter out in Committee—view this decision with some foreboding. For some time we have admired the efforts of the NFC. The Secretary of State was kind enough to pay tribute to the NFC. However, our foreboding amounts to a fear, if not a downright suspicion, that this action is the result, no more and no less, of political pressure. Indeed, it goes against the 1968 Act, introduced by a Labour Government who, at that time, launched the whole inter-modal argument about which the House has had various discussions.
Allowing for the mentioned Select Committee report, let me say that this matter comes through from 1968, when this was set up by a Labour Government, to 1973, when the then Select Committee on Nationalised Industries again came down quite clearly and firmly against any trespassing on the premises—if that is the right way of putting it—of the NFC. Many hon. Members have asked for something positive tonight, and with regard to the NFC I think that it is high time that that body, having been made profitable by private enterprise-style management, should be handed back, at least in large part, to private capital and to private interests. To dismember it just because of political pressure is not good enough.

Mr. Ronald Atkins: Will the hon. Gentleman specify those parts that he would like to see denationalised?

Mr. Temple-Morris: I did not say that. I said that it should be handed back in large part to private capital. If the hon. Gentleman would read "The Right Track", a copy of which I shall lend to him during the debate, he would see that the solution that is advocated there is a BP-style solution—that private capital should have a stake of up to 49 per cent.

Indeed, NFC was going so well that that would have been possible. That is the tragedy of tinkering away with its component parts, not least Freightliners, which was made profitable above the line by good management.
One of the reasons why NFC has been made profitable—I do not wish unduly to tread on any corns of Labour Members—is that because of its independence from British Rail it has been able to take, where economic, off rail and on to road. That is what Labour Members cannot stand. They want it merged, so that rail will have a complete monopoly. I hesitate to think for how long it will continue to be profitable.
There is one other point from the Secretary of State's speech to which I wish to refer. It concerns shire counties. Here I am speaking more as a rural constituency Member. It smacks somewhat of blackmail when shire counties are told that only if they spend more on buses—when many of them are resenting not only the lack of buses but the inefficiency of those that operate and the lack of a fluid and adaptable licensing system, which the Oppposition have advocated time and again—will they get more for their road schemes.
In these times of severe rate support cuts on the shire counties we see a reluctance in these areas to spend money and match the supplementary grant. That is understandable, bearing in mind the great calls on their money, particularly for social services and education. However, as a result our roads will suffer as these counties are responsible for controlling 95 per cent. of them.
Leaving the Secretary of State aside—much to his relief, I expect—I shall now make a few points of my own. The White Paper has been mentioned in detail and many of us see parallels with agriculture. The less the Government have to do, the more White Papers they put out. The debate on the White Paper is mentioned in various contexts, not least of all the parliamentary context. Most hon. Members will have heard my Select Committee argument before. Paragraph 285 of the White Paper reads:
The Government's further proposals relate to Parliament and the public. Concern has been expressed in recent years that Parliament's opportunities to register its views on major issues affecting transport policy have been few and inadequate.


It is fair to say that this year there have been more opportunities to debate transport matters than in the past. However, when we get the occasional debate it is impossible to query the details of transport policy. The same goes for a Standing Committee upstairs. It would take far longer than three hours to debate transport; indeed just to concentrate on the details of British Rails' avoidable cost argument—and what a jungle that can be—would take us days.
However, I believe that we are dealing with a subject which gives enormous scope for a mature bipartisan approach. The Government talk in the White Paper, when dealing with the road programme, about the possibility of not one little Neddy, but three to cover the whole transport spectrum. If there is to be a continuing debate, it should take place in this House. There is far too much conversation and discussion in governmental and quasi-governmental bodies outside this House, and that is not a tribute to us.
We have here a Secretary of State who has advocated a Select Committee in the past. We have a subject where we can have a departmental cover by way of a Select Committee, which is still a rare thing. Then I dare say it would not get into the troubles of the present situation caused by this Government's policy.
My hon. Friend the Member for Sutton Coldfield mentioned nationalisation and paragraph 47 of the White Paper. It was mentioned in Question Time last week as well, but we did not get an answer. I hope that the answer will be given by the Under-Secretary when he replies tonight. Paragraph 47 says:
It remains the Government's intention that there should be an extension of public ownership in road freight transport.
In other words, if it makes a profit, nationalise it. We deplore that attitude. It is just another sop to Left-wing pressure within the Labour Party.

Mr. Adley: Perhaps the words "after the next election" should be inserted in that paragraph.

Mr. Temple-Morris: I am obliged to my hon. Friend. The paragraph also has the temerity to say that massive upheavals are costly and cause uncertain

ties. What greater uncertainty can there be than going back along the road to nationalisation, with all its dreariness?
On the point about European legislation, I wish to draw the attention of the Under-Secretary to the fact that the Secretary of State was not too anxious to answer questions on this last week, and on the question of tachographs, in particular. It is nice to see that the Secretary of State is here; no doubt he has been remanded on bail from the European court. Perhaps with any luck that court will remove him from us before long if the proceedings continue.
I have no axe to grind on tachographs, but I believe that there is a lot of good to be had from them in the context of road safety and fairer competition. However, the more European rules and regulations we get, the more abuse we are likely to see—particularly from the cowboys or small operators. What disturbs us most is, not the Minister's decision on tachographs, but the fact that a decision appears to have been reached by the T and GWU in general and Mr. Alan Law in particular. That is not good enough. It is one thing to talk about confrontation; it is quite another to talk of downright submission by the Government to one faction of the population.

Mr. John Ellis: Is the hon. Member aware of the T and GWU policy, and that it is the union, not Mr. Law, that has a policy on tachographs? The union's policy is well known, and the hon. Member should not make statements without knowing what the policy is.

Mr. Temple-Morris: I wish that Jack Jones would say that—or, if he has said it, I wish he would say it a little louder.
The roads programme has not yet been mentioned. It is mentioned broadly in these debates in terms of what the money is being spent on, and where it is coming from. But the roads programme comprises 95 per cent. of the £20 billion of road transport expenditure. Ninety per cent. of passenger mileage and 80 per cent. of freight traffic are by road. Public expenditure on the programme is declining by £400 million a year. We have had £23 million put back by the Chancellor, but this is not sufficient to get economic growth in the 1980s, which is vital.
A lot is said about economic growth, and the use to which North Sea oil revenues should be put, but if we are to have that growth we must have the roads to put the growth on. We must give priority to our roads. Paragraph 255 of the White Paper deals with the value for money to be spent on infrastructure, such as roads, over and above direct investment in industry.
Just as serious is the expenditure which should be devoted to road maintenance. There is no doubt that the way we are going now means that we are mortgaging our future. Our roads are deteriorating and the county councils' TPP statement made it quite clear last August that this was happening in county after county. Expenditure has been cut continuously from 1973 right up to 1980–81, yet there is more traffic on the roads, heavier vehicles, and all the associated problems.
I hope that if there is a change of Government soon our party will agree that this is an area where public expenditure is needed. I urge the Government to look again at this. When we talk about public expenditure, we at least have the political imagination not always to talk of depriving something else of money. We talk of giving people the encouragement and incentive to work harder, earn more, take home more through less taxation and increase production. This is where the money would come from if we were in power today.

8.9 p.m.

Mr. Tom Bradley: The Opposition motion condemns the Government's handling of transport policy. It was moved by the hon. Member for Sutton Coldfield (Mr. Fowler) in a rather feverish manner. I understand that he spent most of the recess writing a pamphlet designed to solve our transport problems. It was called "The Right Track". I tried to obtain a copy of this document and failed. I cannot believe it has been a sell-out and therefore I can only assume it has been withdrawn.

Mr. Norman Fowler: I could debate this matter ad infinitum, because the publication has been a sell-out. However, since I know the hon. Gentleman so well, I shall obtain for him a copy at the normal price of 60p.

Mr. Bradley: I shall certainly put the money on the board for the hon. Gentleman. I would not have been the least surprised if the publication had been withdrawn.
This evening we heard a speech from the hon. Gentleman that was very strong on accusation, but wretchedly thin on any possible alternative policy. This motion comes from a party that broke up the only real concept we have ever had of an integrated transport policy through the dismemberment of British Transport Commission, as that service was then named, by the sale of publicly owned lorries to private enterprise. We also remember the Conservatives' ad hoc approach to transport matters. They raided the Contingency Fund to assist British Rail over a problem and added a dash of doctrinaire treatment for Thomas Cook by hiving it off to private enterprise. However, the Labour Government soon after taking office produced the Railways Act 1974.

Mr. Peter Fry: Will the hon. Gentleman say whether Thomas Cook made losses in the public sector or the private sector?

Mr. Bradley: The hon. Gentleman should pay a visit to the Library. He will see that Thomas Cook was a profit-making concern when in the public sector.
As I was saying, the Labour Government produced the Railways Act 1974, which endeavoured to deal with the railways, finances on a more realistic basis than raiding the Contingency Fund. This Government also produced a consultative document on total transport policy and then a White Paper. In the recent Queen's Speech we were promised some detailed legislation, about which we have now been given further information by my right hon. Friend the Secretary of State for Transport.
The hon. Member for Sutton Coldfield referred to this year's Labour Party Conference. I have an advantage over the hon. Gentleman since I was there at that conference and he was not.

Mr. Hal Miller (Bromsgrove and Red-ditch): Does the hon. Member regard that as an advantage?

Mr. Bradley: I am chairman of the NEC transport committee and it was my


duty to reply to the transport debate at that conference. The hon. Gentleman was a little unfair to my right hon. Friend, because he failed to mention when describing the Labour Party Conference and deploring my right hon. Friend's policy that the debate on transport at this year's Labour Party Conference focused on two narrowly drawn resolutions dealing with certain railway problems. They were not the kind of resolutions suitable for a wide-ranging transport debate.
Those resolutions rightly reflected the anxieties of the railway industry, an industry tormented by continual Government interference by both parties ever since the war. Nevertheless, I wish to emphasise that our conference did not discuss transport policy in its widest aspects. Therefore, it was unfair for the hon. Gentleman to mention that matter this evening.
Whatever one may think of the Labour Party's views at our conference, or the White Paper, one must agree that the White Paper is a vast improvement on the consultative document which preceded it. Let me give two principal examples in that respect. First, the White Paper has granted the bus industry a reprieve by a decision not to halve the national provision for bus revenue support, which had previously been foreshadowed in the consultative document and the public expenditure White Paper, Command 6721.
Secondly, the White Paper has removed the question mark over the future size and shape of our national railway network by making a clear commitment to maintain a national railway. It has rejected the notion that our rail system can be reduced to some mythical profitable core by cutting out one service after another, irrespective of the national interest. Surely we all agree that the railways have suffered an intolerable degree of Government interference over the years and therefore a natural nervousness persists throughout the industry.
It is all very well for Conservative Members to scoff at that remark, but I invested my life in the railway industry when I became an employee, and I know very well the turmoil created in the industry as one massive reorganisation followed another in the period after 1948. What is needed now is a boost to British

Rail in the form of higher investment limits to enable it to provide a better service and attract more passengers.
A strong organisation base is needed in addition. Therefore it is right that Freightliners should be returned in its entirety to British Rail. It is also the most effective and practical way of achieving a meaningful degree of road-rail integration. My right hon. Friend's announcement tonight of the return of Freightliners to British Rail will be warmly welcomed throughout the Labour movement generally and the railway unions in particular.
However, there will be problems, and my right hon. Friend is right to say that we require speedy passage of those provisions. For the rail unions there will be many complex problems of renegotiation between one management and another in terms of pay structures and promotional opportunities, to mention only two factors.
Until we can achieve a nation-wide system of sensible, co-ordinated freight transport movements, the statement in Paragraph 180 of the White Paper, that there should be fair competition between road and rail, must be welcomed by everybody. Once such conditions have been set, so that all transport modes are paying their true costs, there can be no case for subsidies to freight carriers, road or rail. That much is accepted by the British Railways Board.
An improved and more secure railway system cannot, however, provide the answer to our transport problems in isolation. Road will always remain the dominant partner, but there is still plenty of scope to shift certain traffic to rail. I am glad that references to pipe dreams have been dropped by the Department.
Above all, we must not abandon the Labour Party's long-standing emphasis on co-ordination and integration. This is much more important than action at local level. Any moves that might lead to the handing over of responsibility for the future of many provincial and rural services to shire counties could lead only to the fragmentation of the national rail system and endanger the stability of the main trunk routes.
In any case, the past record of county councils leaves no room for optimism.


There is no reason to believe that providing local authorities with wider powers will result in more effective planning and integration of services. Of course there is a need for local initiatives, but, without the type of controls and supervisory powers over planning and investment by a national transport planning authority envisaged by the TUC and Labour Party, there can be no guarantee that the aims of an efficient and co-ordinated system of inland transport will be met.
In my judgment my right hon. Friend is receptive to ideas. He said so again this evening. This is certainly not the time to pillory him. He wisely said that his own White Paper was not the last word on transport policy. I and my right hon. and hon. Friends have every confidence that he will produce a policy that will provide a less wasteful and more efficient transport system for our nation.

8.20 p.m.

Mr. Peter Fry: I wish to make two comments on the speech of the hon. Member for Leicester, East (Mr. Bradley). First, I point out to him that the anxiety felt by the railway unions on the very narrow motion at the Labour Party Conference is echoed tonight by the much wider anxiety from the public about the lack of Government transport policy. That is why the Opposition tabled this motion.
The hon. Member also spoke about no subsidies for any form for freight. Do I understand him to mean that he would welcome a complete change in the accounting system of British Rail so that freight would cover the full share of its costs, not on the rather spurious device that it now uses?

Mr. Bradley: Mr. Bradley  indicated assent.

Mr. Fry: I wish to refer to some of the comments of the Secretary of State, who, I regret to say, has left the Chamber. What was most interesting about the right hon. Gentleman's speech was that he proved the necessity for the motion. He spent almost all his time talking about a transport Bill that we have not yet seen and a transport supplementary grant details of which the county councils have not yet seen. If ever there was a condemnation of Government policy it came from the Secretary of State's speech tonight. We heard more tonight about new

policies than we have heard in the past four years. Therefore, the motion put down by my right hon. and hon. Friends has been totally justified.
The Secretary of State said he thought that the anger of my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) was a little synthetic. I contend that if the right hon. Gentleman wishes to see real anger he should talk to commuters whose season tickets are to go up by 17 per cent. while their incomes are pegged at a 10 per cent. increase. He should go to talk to people in small villages and towns with heavy lorries rumbling past their doors who cannot have bypasses because of Government cuts. He should talk to people in rural areas who are becoming totally isolated because of the lack of public transport due to the Government's failure to take action on the licensing system. He will see anger there. There is plenty of anger for Ministers to discover if they wish.

Mr. Roger Moate: My hon. Friend has mentioned the anger of commuters. Does he not think that they would be even more angry if they heard the Secretary of State say that some commuters were "even paying £30 a month"? If the Secretary of State displays such ignorance and insensitivity, does that not explain why the Government have disregarded the true interests of the travelling public? Many commuters are paying £50 or £60 a month, and that is by no means exceptional.

Mr. Fry: My hon. Friend is correct. The latest increases come after savage increases in recent years.
My comments in this debate are made more in sorrow than in anger. The Secretary of State and the Under-Secretary have usually been most courteous and helpful within the constraints of the policy of almost total inertia which they seem to have been pursuing in the last few months. I hope that the Under-Secretary will pass on my remarks to his right hon. Friend.
I also feel considerable sympathy with them. They are merely making the latest move in the peculiar game of musical chairs in the Government and in the Department of Transport since Labour came to office. If the same determination had been shown in pursuing new policies as there has been in changing Ministers,


this debate need not have been so censorious.
There has been some movement inside Government circles and it is interesting to see exactly what that movement has been. We began with the Labour Party's 1974 manifesto. I suppose that Labour Members would agree that the least said about that, the better. But, whereas the hon. Member for Leicester, East regarded the progression to the consultative document presumably with a certain amount oforror—

Mr. Bradley: With reserve.

Mr. Fry: —because he thought that the White Paper was a better document. I hope that he realises that the Opposition thought that the consultative document had taken one or two faltering steps in the right direction and that we were tending to win the argument on transport matters.
As my hon. Friend the Member for Leominster (Mr. Temple-Morris) pointed out, nearly all the useful and constructive suggestions and constructive pieces of legislation have emanated from the Opposition. Therefore, I do not think that the Government need take any particular credit for any improvement in the past few years.
I wish to take up one point raised by the Secretary of State. He said that we should try to see what the objectives of transport policy should be. It is rather interesting to examine those objectives and the comments that have been made on the White Paper in the light of those objectives. From what the Secretary of State said the impression might be given that the White Paper had been greeted with cheers from all kinds of organisations. As the right hon. Gentleman knows all too well, it was not only the Labour Party Conference which had some adverse thoughts. The RAC described it as:
a dangerous U-turn in … transport planning which could be heading along a route to disaster".
The AA described it as:
a disappointment in that it has abandoned the concept of freedom of choice.
The Society of Motor Manufacturers said that it was

a major disappointment. The reality of consumer choice … is frankly stated but the obvious conclusions are ignored.
In case my quotations appear selective, I add in fairness that the NUR stated that the White Paper
pays lip service to the idea of producing a well-planned national policy.
The Labour Party Conference rejected it.
It is possible to make quick, snap judgments on the White Paper in such terms, but I wish to look at three particular areas where the Government's policy has totally failed.
The first is in the realm of public transport, where in the past five years we have seen subsidies increased by four times. The total of public money now put into road and rail public transport amounts to the staggering figure of £1,200 million. Subsidies to road and rail since 1971–72 have increased by no less than 362 per cent. Whereas investment on road maintenance has gone up by only 21 per cent., spending on new roads, motorways and trunk routes has dropped by 20 per cent. It is obvious that in looking at public transport the Government have preferred to subsidise rather than to invest in the future, and that is my criticism of Government policy on public transport.
The quite blatant attempt at blackmail of the county councils by the Secretary of State has already been referred to, and that is an extension of the same approach. The real question that we should be asking is whether, after this enormous investment, public transport is any better, and clearly it is not. In many respects it is considerably worse.
If the Government are hanging their coat-tails on the idea of making bus companies the main source of transport in this country, I refer them to the TRRL Report, which indicated that subsidies—without any cuts in services—will amount to £800 million by 1985. If the Government are to keep within their spending limits, where will they find the money to make up the subsidies? I have a sneaking suspicion that the Government will hammer the county councils and force local authorities to find more money from the ratepayers to keep up the levels of subsidy. If the Government's policy had been shown to work, that might be acceptable, but when the Government's policies palpably fall short, that is an


indictment of their public transport policy.
Another serious subject is the Government's failure to make available sufficient funds to maintain roads. The figure for 1973–74, the allocated amount, was £428 million. For 1979–80 that will drop to £351 million.
It is easy to think that one can save money on roads because that is more convenient than saving money on some other kind of spending. However, the House should stop and reflect upon the real dangers created by a cut-back on road maintenance on such a scale. There is increased danger to road users, particularly as skidding becomes more likely. Devon County Council has reported that skidding accidents have increased by one-third since 1974 There is increased danger to pedestrians. A large number of footpaths are no longer properly maintained, and South Glamorgan County Council has referred to the growing number of claims for compensation. There are increased noise and vibration from vehicle movement, and the GLC has received a greater number of claims for such damage. There is increased damage to vehicles caused by potholes and deformed surfaces. Dorset County Council, for instance, has had difficulties there.
Above all, and most important, this can produce a long-term waste of public resources because—as any county surveyor could tell the Minister—the longer one delays essential maintenance, the bigger will be the cost and the loss to the public purse. The Government have clearly failed to achieve their object with road maintenance.
I finally turn to the road programme. The House knows of my personal commitment to providing an efficient road system in this country. I do not push this idea because I do or do not want a road through my constituency or because I have a particular interest. I do so because I genuinely believe that if this country is to have the economic revival that we want, it is absolutely essential that we invest in a road programme that will give British industry modes of transport comparable with those of its competitors on the Continent and give, for example, our hauliers a far better chance of competing with those on the Continent. The Minister must know that facilities in Europe are better than

ours and that we are now falling woefully behind.
I advocate road building not purely to upset the environmental lobby—although that lobby might take heart from the fact that a new road often brings great environmental advantages—but because we want a fairer apportionment of total transport expenditure on essential links. In that respect Government policy in recent months has been most deficient. During Transport Questions last Wednesday my hon. Friend the Member for Banbury (Mr. Marten) made this interesting point:
Is the Minister aware that the high number of purely local Questions on the Order Paper amounts to a criticism of his Department and its procrastinating attitude towards the development of road systems? "—[Official Report, 16th November 1977; Vol. 939, c. 568.]
There were no fewer than six Questions for oral answer on the Order Paper last Wednesday about new road projects and many more for Written Answer. They had been put down by hon. Members and my hon. Friends whose concern about the future of the road programme is extremely real.
Yet every time public expenditure has to be assessed, it is the road programme that is cut. Of course that is the easy way out, but in the long run it is the disastrous way out. It is time that the Government began to invest in the future rather than to placate a few voters for the next General Election.

8.35 p.m.

Mr. Ronald Atkins: The speech of the hon. Member for Wellingborough (Mr. Fry) was typical of the political schizophrenia that emanates so frequently from the Opposition. The hon. Gentleman complained about fare increases for commuters but went on to attack subsidies for public transport. The problem with commuters is common to every country. Unlike Britain, other countries are very generous with their public subsidies.
The hon. Member spoke about the deficit on the railways, but in West Germany last year the railway deficit, including subsidies was £3,750 million. The hon. Gentleman's figures were minimal compared with this sum. To take the example of another high-flying country, Japan spent £2,500 million on its railways last year.

Mr. Fry: I am aware of the figures that the hon. Gentleman is quoting, but those countries have produced the wealth that enables them to spend money in that direction. Unless we make the right kind of investments, we shall not be able to produce the wealth.

Mr. Atkins: Those countries are high flyers because they invest in their public transport systems and make money in that way. They are not the only countries. France is another example. This has nothing to do with public ownership either, because the United States has found the same great difficulty with its privately-owned railways. The railways in the United States have been reorganised time and again, yet the federal Government still have to pay billions of dollars to keep them going—and they are kept going because they are needed in order to build up the wealth of the country.
The hon. Member for Wellingborough also spoke about the rumbling of heavy lorries outside houses, but this is bound to happen with a criss-cross network of roads. Other countries make sure by way of public grants, that a much larger proportion of freight traffic is taken by rail. We have the lowest proportion of freight carried by rail of any major industrial country.
The hon. Gentleman mentioned fair competition for our lorry firms with those on the Continent, but firms on the Continent are taxed much more heavily than British firms and they have to deal with tachographs and limited drivers' hours as well. Our firms are being sheltered compared with those on the Continent.
The hon. Member for Sutton Coldfield (Mr. Fowler) said that criticism of the Government's transport policy was not confined to Opposition Benches, but the policy is not really opposed by the Opposition at all. There has been a good deal of shadow-boxing in the debate between the Front Benches, and the hon. Member for Sutton Coldfield has more strength in his footwork than in his punches. This is partly because he is a friendly sort of person, but partly because his case is lacking.
The Opposition's chief criticism is that the Government are not doing as much as hon. Members opposite would like in cutting Government expenditure. I have some sympathy for the Government

Front Bench because it is having to operate at a time of great financial restraint. There is no doubt that it is inhibited in that way. It prevents it from formulating the transport policy that we should like to see. The Opposition are always complaining about Government expenditure in general and about expenditure on transport in particular. They demand better public transport, but they are prepared to spend more money to get it? That is the way to get better public transport.
We could provide many schemes that would improve public transport immensely if the capital expenditure were provided. I believe that the expenditure would be recouped as a result of increased production. The Government's grant to British Rail is extremely modest compared with the grants made by other countries in their rail systems. I wish that both sides of the House would acknowledge that public transport throughout the modern world poses a difficult problem. That is not due to the inefficiency of public transport or to the sort of ownership under which it operates.
The Conservative Party, as well as the Labour Party, expresses aspirations about transferring freight from road to rail. That is stated in the February 1974 manifestos. It is definitely stated that the transfer of goods from road to rail should be encouraged. At that time we had just suffered a great oil crisis. The Front Benches were in harmony. They were both claiming credit for the Railways Bill in our debates in 1974. There seemed to be unanimity at the time of expenditure on the Channel Tunnel. All that has changed because of the financial crisis that came upon us.
Despite the aspirations of the Conservatives to transfer freight from road to rail, I have heard the hon. Member for Sutton Coldfield call for the abolition of the diminishing freight grant. That is his call even before heavy road vehicles are taxed at their true attributable cost.
At present, British Rail is in great difficulty because petrol is so cheap. Road haulage is relatively cheap. It would be a sad thing if rail services were so eroded that they could never be re-established so as to meet our requirements when they will be truly needed as a result of oil shortages.
I heartily congratulate my right hon. Friend the Secretary of State on taking the practical step of retaining rail freight services by putting Freightliners under the control of British Rail. That will make for easier integration with the air-brake wagon that British Rail is trying to develop. It will make co-ordination easier.
There was some conflict between the two organisations not so long ago when the National Freight Corporation chairman complained about British Rail's investment in air-brake wagons which were so badly needed. It is important to remember, bearing in mind that British Rail is so often hit by politicians, that it was British Rail that pioneered Freightliners. It was well ahead of railway organisations in any other country. It showed its ability to run the service, which was extremely successful.
It is true that the real opposition to the Government's transport policy comes from Labour, both in the House and in the country. There is no doubt about that. I can understand that it has been difficult for the Department of Transport to provide the money that is necessary. However, the Labour Party and Labour Back Benchers are consistent. We believe that Government funds in the short term, and perhaps in the longer term, will be needed to hold fares and freight charges. The Opposition do not believe in that increased expenditure. That is where the fundamental difference lies.
I agree with the hon. Member for Sutton Coldfield that an attempt to devolve transport responsibilities to the shire counties would be unsafe. I agree that an attempt to cut down total expenditure may be the reason behind such a move. Would the Opposition agree to the extra expenditure needed to provide good transport in the shires? That is absolutely vital if we are to retain transport there.
The hon. Member for Wellingborough spoke about freedom of choice. There is no freedom of choice in passenger transport for the majority of people, and there never will be. The majority will never have individual access to a car.

Mr. Fry: Has not the hon. Gentleman seen the statistics showing that 63 per cent. of households have their own cars? How can he talk in this way?

Mr. Atkins: That is perfectly consistent with what I have said. For most of the time, the majority of individuals will never have access to a car. What usually happens is that the husband commutes by car, leaving his wife without the vehicle. Often in our matriarchal society the wife keeps the car and the husband commutes by train. Even so, children, old people and other who cannot drive rely entirely on public transport.
We have the awful example of Los Angeles, the biggest city in the world in terms of area. One-third of it is taken up by roads, one-third by car parks and the other third by houses. There are 16 or 17 three-way motorways going through the city. The families there need four or five cars, depending on the size of the family. This is madness. When the Beeching Report was published, Mayor Brown of Los Angeles, speaking to the British people, begged them not to lose their public transport system, a system which some hon. Members are anxious to destroy. To hand over public transport to the Conservative-controlled shire counties would destroy public transport in those counties.
Public transport is going through a difficult period because there is a glut of cheap oil. This will last for only a short period. One reason why our transport patterns are so wrong is that we have relied on cheap oil for so long. This will not continue. The glut will soon disappear. It will soon become obvious that all transport services must be maintained and expanded. It is a pity that we do not have a joint view on the Front Benches as we did in 1974. The crisis of 1973 will return, but it will be far more dangerous and more permanent.

8.50 p.m.

Mr. David Penhaligon: I take the view that as time goes by the Government's transport policy gets better. The White Paper was better than the Green Paper, and at least two out of the three announcements today represent an improvement on the White Paper. Perhaps we can keep this ball rolling. We might end up with something at least reasonable or a great improvement on the attitudes we have experienced in rural areas for a very long time.
Hon. Members have spoken about maintaining transport in rural areas.


What is wrong with the Government's White Paper saying that they will provide extra money to moderate bus fare increases and to maintain some form of rural transport? There is a clear recognition now of a rural transport dilemma and of the bidding between the Conservative and Labour Parties to convince the rural electorate that each knows them best. That situation can only help people in areas like mine.
There is a willingness now to try to experiment in order to find the answer. Any hon. Member who claims to know the answer to the rural transport problem is a very clever man. I assure the House that the answer to the problem is very complex, if one exists at all. But at least we are to have such new experiments as car-sharing, community bus services and the encouragement of post buses. There must be more flexibility.
As someone brought up in and now representing a rural area, why do I think that this new attitude is a great improvement? People in rural areas face a fundamental problem both in society in general and in transport problems. As our nation gets richer and people can afford more and more things—not only cars, but telephones and other modern appliances—what is going to happen to the minority of people who simply have not got the money to join the increasingly prosperous general club?

Mr. Toby Jessel: Who is getting richer?

Mr. Penhaligon: Observations such as that are nonsense. Everyone is getting richer over a period, and the process will continue. I used to work for Homan Brothers in Cornwall. It rebuilt a factory in 1950, and the car park then covered an area smaller than this Chamber. All that the firm has built in the last 20 years has been car parks. Therefore, to say that people are not getting more prosperous and are not getting more of the commodities of modern industrial society is nonsense.
However, that little exchange sums up my belief that the Conservative Party does not understand what is happening to the rural poor. It does not seem to appreciate that there is a minority of people in our community who have been

left out of the improvement in living standards, and, as vicious policies, including the abolition of rural buses, as has been the case in some areas, are carried out, such people will have relatively still worse living standards than people in their own villages have experienced over the past 100 years.
Great play has been made of the fact that responsibility is to be given to the shire counties to make the decisions. I welcome that—indeed, I encouraged the Secretary of State to make such a move. I cannot believe that any authority other than the Cornwall County Council—it is not controlled by the Liberal Party—can make sensible decisions about transport in Cornwall. I fully recognise the political complexion of many shire counties, but their people must campaign; they must nag their local councillors. My experience of county council politics is that the vast bulk of those elected are, frankly, in some ways political cowards, and if they are shouted at loud and long enough by people in their area they will make more logical decisions.
If that should prove to be wrong, all I can say is that I do not believe that those who inhabit that enormous building which basically houses the Department of the Environment, of which the Department of Transport seems to be taking over a growing section, can possibly solve the problem. I spoke earlier of the rural transport dilemma, and there may not be a full answer, but I am quite sure that the bureaucrats in the vast office block here in London cannot solve the problem of rural transport in such areas as mine.
We have another £25 million for concessionary bus fares. I am pleased about that, though I am ashamed to admit that my county council is one of the meanest in the country in that respect. However, it has another chance. That is the local option.

Mr. John Ellis: Only a couple of minutes ago the hon. Gentleman was saying that we should give them more power.

Mr. Penhaligon: The House is in the process of making a major devolution of power. If we devolve power, we must give power not just to do what we would like others to do; we must give them power to do things that we would not like them to do. I am prepared to argue


for the system as it is, and I shall continue to use all available platforms to get Cornwall County Council to change its attitude on that matter.
There are no substantial rail cuts. The White Paper indicated that there might well have been. The changes hinted for the control of local train services are largely dropped. I know that the Minister claims that he would not introduce them for this year anyway. If the present Parliament continues, he had better not try to deliver them next year either. I believe that there is no great chance of that.
I was pleased today by the announcement about car parking. As outlined by the Minister, it made a great deal of sense. On the other hand, I am not convinced of the rightness of the announcement with regard to Freightliners. I read the submissions presented from both sides. The paper from British Rail arguing that it should have Freightliners convinced me that it should not, and the argument from the other side saying that it should keep Freightliners tended to make me think that perhaps it should get rid of it, so much did each overstate its case.
I suspect that the reason for the decision is that the rail unions have asked for an enormous amount of investment. The simple fact is that the Minister does not have the money to give, the only thing he has to give is Freightliners, and he has decided to hand it over. When the Divisions come on that, they will be very interesting. I am not saying that my party is necessarily against it at this precise moment—

Mr. Norman Fowler: In the unlikely event of a vote on it, how will the hon. Gentleman vote?

Mr. Penhaligon: I have not decided. I can see nothing wrong with it. I do not understand the panic in the House to make decisions about chucking Freightliners back and forth. I cannot believe that another 12 months with Freightliners in its present position would do any harm at all.
I turn now to a subject which has already been mentioned several times and on which a case is now being made which calls for an answer. I refer to the maintenance of local roads. Obviously, it is in the interest of counties generally to

argue that if they do not get a lot more money than they are now getting the level of maintenance will fall. I should like there to be an inquiry into the validity of that claim. If it is valid, the House should do something to put matters right. If it is not, we can carry on as we are.
It is nonsense to suggest that the roads in the United Kingdom are particularly bad. I recently visited New York. Locally, New York is known as "pothole city". I admit that there is not a road in my constituency from one village to another which compares in dereliction with the main road through the centre of New York. It is not an accurate representation to portray the British road system as antiquated. I would appreciate an inquiry into the road system because that allegation is made by many people with conviction and venom.
The money previously allocated to the building of a trunk road system has been reduced. However, I must point out that I can drive from Plymouth to the north of Glasgow on dual carriageway roads or motorway every inch of the way.

Mr. Ronald Atkins: The hon. Gentleman could go by train.

Mr. Penhaligon: I agree, but I am saying that it is possible to drive every inch of the way from Plymouth to the north of Glasgow on dual carriageway or motorway. The vast bulk of that part of the road system has been built since I was legally able to drive a car 16 years ago.
It seems to be argued from this side of the House that road building at that intensity must continue for ever. I do not believe that the argument is justified. I cannot believe that such a level of road building must be maintained. It is true that some ports deserve to have a better road system to connect them to London, the Midlands and the North of England. I am not arguing against an investigation of that. I am arguing the case for what I call community bypasses—that is, bypasses around some smaller areas, the bypasses being built not necessarily with the motor as the first thought in the Department's mind but built with a view to securing an improvement in the living standards and environment of those living in the smaller areas.
A series of community bypasses would improve many villages and make them much more livable. Dual carriageways have been built to near motorway standards to within 10 miles of Land's End. I sometimes take the view that if one is forced to argue in the House to the effect that the Government are wasting money I want a fair share wasted in my area. I cannot justify the building of dual carriageway roads to near motorway standard to within 10 miles of Land's End. I believe that the Government are beginning to recognise that.
The Minister has not got his transport policy far wrong. If anything is condemned by the Automobile Association, the Royal Automobile Club the Conservative Party and the Labour Party Conference it must mean that the Government are getting their policy somewhere near right. I shall not vote for the motion tonight.

9.3 p.m.

Mrs. Gwyneth Dunwoody: I have a strong sense of smell, and I detect a slight whiff of hypocrisy in the Chamber. Apart from anything else, my right hon. Friend is to be congratulated on the fact that the Opposition could come up with only such a miserable suggestion that they disapprove of
the Government's handling of transport policy
What we have not heard from the Opposition tonight is what they would put in place of that transport policy. All we heard were the same arguments that the Opposition ordinarily rely on. It is right that someone should point out exactly what the transport policy of a Conservative Government would be. It would be to give certain cosmetic assistance to some commuter areas but not to provide any money for investment for new rolling stock or improved services for the railways. The Tories would give a certain number of extra licences to small operators in rural areas, but we have no indication from them as to how they would insist that the licensees would comply with requirements as to drivers' hours and proper insurance on ensure that the rate at which such one-man firms operated complied with the standards to which rural populations are entitled just as much as those who ordinarily benefit from properly organised bus undertakings.
My right hon. Friend is to be congratulated because the White Paper is a tremendously constructive move.
Because of the lateness of the hour, I shall concentrate on one narrow point. The Secretary of State must be courageous when the Bill is introduced. That is for the simple reason that there has been a great deal of expenditure on roads. My right hon. Friend's arguments in answer to the roads lobby are balanced and they show that he is aware of the real problems.
The Secretary of State must be deeply concerned about morale in the railway industry. I emphasise that because what is happening in the railway industry is dangerous. It is easy for the Opposition to use the railways, the railwaymen and the Railways Board as a platform for their constant attacks on nationalised industry, but they are destroying the faith that the ordinary railwaymen have in the future of the rail system.
My right hon. Friend's proposals are probably the most constructive that we have seen in the last 15 years. I represented a rural constituency in the West Country when the Beeching exercise was operating. I fought hard to retain rural transport lines. All sorts of tricks were used to distort the figures that were meant to show how many people were using rural railway lines.
I remember that in that highly independent, unique and thoroughly intelligent kingdom of Cornwall men working at Falmouth Harbour always took an early train to work. Under the then Conservative Government and Lord Beeching, the times of those early trains were so altered that people were not able to use them because they did not get them to work on time. Artificial figures were used to prove that the trains were under-used and that they must be cancelled.
We need an act of faith from the Government. The simplest way in which they can restore the true atmosphere in the railway industry is to facilitate investment so that the railway system not only holds its own but is developed.
When I was a child, I had difficulty in imagining what Hell was like. Since I have been involved in the EEC, I have attained a relationship with the railways of Europe. I can tell the House that British Rail is the best railway system to be found in Europe. That situation can


be maintained only if money is invested in research and development.
If my right hon. Friend wants to know what the horrors of rail travel in Europe are like, I suggest that he takes the 1.16 a.m. stopping train out of Genoa to Milan. That journey proves conclusively that British Rail has no faults so far as the passenger is concerned.
British Rail needs investment. In my constituency, high-speed trains of quality and imagination are being built with such drive that they will show the rest of the world the best of British workmanship. They can be developed only if cash is made available.
The railway industry should not come under constant attack. I wish that an Opposition Member would get up and say that British Rail is something of which we should be proud and that the Conservatives would like to see the suggestions in the White Paper put into operation, because they believe that they are an act of faith. If an Opposition Member did that, for once in his life he would be doing something of which he could be proud.

9.10 p.m.

Mr. Anthony Fell: I hope that the hon. Member for Crewe (Mrs. Dunwoody) will forgive me if I do not take up her comments, because I have particular points that I wish to put to the Minister. In doing so, I pray that the deliciously belligerent speech of my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) will in no way upset the Minister's usual charm and equanimity to such an extent that he does not consider the points that I shall raise with him and, indeed, that he will look upon them with the greatest benignity.
One of the issues I wish to mention concerns the ports, which, the Minister will remember, were excluded from his survey in June. It was said in that survey that
The review has concentrated on inland surface transport, and has not dealt substantively with some matters, notably ports, shipping or aviation.
The question I want to raise concerns shipping and ports, and in particular the area of East Anglia. I have written to the Minister about this. We are in some difficulty. A short time ago an hon. Member talked about being able to drive

from Plymouth to Glasgow on motorways. That is quite a long way. We in East Anglia cannot drive more than two-thirds of the way from London to Yarmouth on motorways.
Yarmouth, together with other ports on the East Coast, has developed enormously in the past few years. For instance, when I went there as the Member of Parliament Yarmouth was almost falling into the sea, but it is now a thriving port. I claim no credit for that fact. It is now a port largely used by traffic going to the Common Market and other countries in Europe. It is part of the lifeline between this country and the EEC. Yet it will be in dreadful difficulties unless the Minister is able to carry out the implied promise contained in the Press statement issued on 26th October.
The introduction to that Press statement stated:
The Parliamentary Under-Secretary today announced decisions on two bypasses in Norfolk: the selection of the route for the eastern half of the proposed Norwich southern bypass and the addition of a scheme of the western bypass of Great Yarmouth to the trunk road preparation pool.
I pray that "preparation pool" will not mean that it goes round in a sort of whirlpool for years and years before decisions are made and action taken.
It is vitally urgent that two things happen. One is that the trunk road from London via Newmarket and Norwich to Yarmouth is completed. The second separate urgency is that the second river crossing, as it has been called for about the last 40 years in Yarmouth, at last becomes a fact. If this does not happen and the Haven Bridge should fail in some way—Heaven knows, it is old enough—it would stop altogether traffic movement to the port of Great Yarmouth.
I hope that the Minister will seriously consider putting these two matters on the priority list for roads and ports development in this country, particularly as Yarmouth is so important to the European lifeline.

Several Hon. Members: rose—

Mr. Speaker: Order. The winding-up speeches will begin at about 9.30 p.m. With the co-operation of hon. Members, I can get another two speakers in, one from either side of the House.

9.15 p.m.

Mr. Robin F. Cook: I am grateful for this opportunity to say what I accept should be a few words, and I shall try to make my contribution as brief as possible.
The Secretary of State dealt with two matters on which I should like to comment. The first was his remark about the return of Freightliners to British Rail. In view of the time available, it would be pointless of me to rehearse the arguments in favour of this move. As the hon. Member for Leominster (Mr. Temple-Morris) said, we have been through them in Standing Committee earlier this year. Of course, my right hon. Friend has reached the right decision. It would be foolish of me to pass by the opportunity to put that on the record, as it is not certain when I shall have the next opportunity of saying so to my right hon. Friend.
It is a welcome and sensible change, and I believe that the work force and management of Freightliners will be particularly welcomed when they return to British Rail. British Rail will be foolish if it does not give full range to the expertise of the management of Freightliners, including the current managing director, who is a former British Rail man.
The other matter to which I refer is one on which I cannot give the same degree of endorsement to my right hon. Friend. It concerns his remarks about local participation in decisions on branch lines. He said that part of the White Paper was tinged with green. Some of us might hope that the typescript had faded completely from the pages. We are disturbed that he intends to press ahead with consultations, but we are not surprised to hear that these consultations have not started.
The question which my right hon. Friend will put to the shire counties is awesome. He will say to them that these are branch lines which he, with access to the Treasury and direct access to the Consolidated Fund, can no longer afford to support, and that they are branch lines which he, with his position in the Department of Transport and his relationships with British Rail, is unable to see a way of making profitable. He will then ask

the shire counties "Will you take them over?" It will not be surprising it most of the shire counties, faced with that choice, say "No".
Before my right hon. Friend consults the local authorities, I hope that he will answer one or two questions about the proposal. What happens when these branch lines run through more than one shire county? If one takes the 6 per cent. of "other passenger mileage" referred to in the consultative document—and I assume that these are the lines about which my right hon. Friend will consult—he will find that only one in five of these branch lines runs within one shire county. Two in five of them cross three counties and a few even cross six counties. What conceivable arrangement could one have if one had to consult six shire counties about the future of a single line, bearing in mind the need to share out these costs?
What expertise do the shire counties have to decide whether a line is essential or to decide their appropriate share of the costs? It is a depressing fact that very few of the shire counties have to date used their existing powers to make any kind of contribution to real costs. Out of 47 shire counties, only six are at present making any kind of financial support to British Rail, and three of these six are making payments of £4,000 or less. That does not encourage us to have any great hope about the future of branch lines if they are passed into the hands of those who have shown such little interest in rail transport to date.
A question also arises concerning the future of the transport users' consultative committees if these proposals go through. There is a reference in the White Paper to legislation, if necessary, to change the 1962 and 1968 Acts to make this consultation procedure possible. The only reason for changing the legislation, however, is to take away the existing power and authority of the TUCCs where there is a proposed closure.
What is my right hon. Friend saying? Is he saying that the TUCCs have paid insufficient regard to local interests and that local interests nave had difficulty in making their views known about branch lines? If he is saying that, it is difficult for us to agree. After all, the figures show that the TUCCs have been very vigilant in guarding against closures of


branch lines. Some of us suspect—perhaps it is because of our devious minds—that that is precisely why this change is suggested.
If the TUCCs lost this power they would lost the only power they have over railway operations, and if that happens they are liable to much more of a tootheless tiger, ignored even more by the nationalised industries than they are at present. I shall be extremely surprised if my right hon. Friend finds any support for this proposal among any of the people who have served on the TUCCs.
I am conscious of your instruction, Mr. Speaker, to save time, but I think that it would be unfortunate if we were to conclude by dealing only with the Government's policy. It is, after all, an Opposition day and it is an Opposition motion that is before us. It would be only fair, before we conclude the debate, to spend some time on the policy statement which has been issued by the official Opposition spokesman on transport.
Unlike my hon. Friend the Member for Leicester East (Mr. Bradley), I have been able to obtain a copy of "The Right Track", and I would recommend it to my hon. Friend as at least making easy reading, if not possibly rather too tactile reading. I quote to the House the key sentence from the passage on railways:
The central aim of policy must be to seek for the passenger and the taxpayer a railway running at maximum efficiency and the lowest possible cost.
I do not think that there will be many hon. Members who feel that that is perhaps too bold a statement or too imaginative a proposal. I think that I can straight away reassure the hon. Member for Sutton Coldfield (Mr. Fowler) that it is not our intention to campaign for a railway running at minimum efficiency and the maximum possible cost.
There are, indeed the makings of a consensus here, a pact, perhaps, between the two Front Benches on the issue. It is curiously, the possibility of a pact which is reinforced when one comes to the one passage in the booklet which refers to the pricing of British Rail, that being on page 11 and referring to commuter services. Having concluded that railway services should meet their costs,

the hon. Member for Sutton Coldfield then hurriedly adds:
In some cases this will take time. Commuter services … are a case in point.
What does he conclude about commuter services? He concludes not that they should not pay their costs but that the commuter
must be given time to adjust.
The curious thing about this is that it is, of course, only four months since we had a White Paper in which the Government themselves produced the absolute commitment for the commuter to pay his own costs. What do they say in Paragraph 132 of the White Paper? They say:
Increases which prove necessary should be phased so that commuters have a period of years in which to adjust.
So there we have it. There is the gulf between the two Front Benches. The reason for a motion condemning the Government's transport policy boils down to this difference: the hon. Gentleman believes that the commuter should have time to adjust, my right hon. Friend believes that he should have a period of years in which to adjust. That is the sole difference between the two doctrines.
However, the full rapidity of the docucent can be savoured only when we reach the final paragraph on railways, when, in acknowledgment, I think, that something is lacking in the previous four pages, it says:
Clearly many decisions about railway policy—for example the level of investemnt—must wait until we have taken office.
I am bound to say that, in view of the hon. Member's commitment that
our approach is to seek a future for the railway industry",
we should have the right to ask him to seek and to find that future before the Conservatives take office, especially when dealing with what is the vital question of investment—the question on which all else turns—because unless we get the kind of investment to which my hon. Friend the Member for Leicester. East has referred there will be no future for the railway industry, whether or not we get Freightliners.
I should like to end by saying that I, too, was in America earlier this year and I made a particular point of looking at


the railway industry while I was there. I was appalled at some of the things that I discovered. I discovered that there are freight branch lines in America on which the maximum speed is 6 mph because of the lousy state of maintenance of the track. I discovered that the passenger timetable for the whole of the northeast of America is exactly this size. For the benefit ofHansard, which can hardly indicate my gesture of its size, may I say that it fits very conveniently into one breast pocket.
The Americans are now desperately aware of what they have lost because they are aware of the cost in lost environment, the cost in social problems and, most of all, the very greedy energy consumption of the private car. They are now trying to find their way back, but it is very expensive to do so once one has allowed the railways to sink into a state of irreversible decline. We must learn that lesson and prevent it happening here before we reach that state of irreversible decline.

9.25 p.m.

Mr. Robin Hodgson: In the few minutes that are left to me I am afraid that I cannot follow the hon. Member for Edinburgh, Central (Mr. Cook) and I hope that he will not mind.
My hon. Friend the Member for Wellingborough (Mr. Fry) made an important point when he referred to the necessity to have an adequate maintenance programme to preserve our existing road network. He referred to the damage done to lorries and other vehicles if the road surfaces were not adequately maintained. There is another aspect to this problem. In my opinion a great deal too much salt is applied to motorway surfaces. This does great damage to the underside of vehicles, to the motorway itself and the environment generally. I hope that the Government will look into this. If they do, they may bring great benefits to motorists and taxpayers alike.
I wish to concentrate on a small corner of the Minister's vast empire—that of motorway service areas and the conditions available at them. I do not wish to repeat the remarks of Mr. Egon Ronay which have been highly publicised recently. I just ask the Minister to consider the position of the great British

motorist with two fractious children in the back, a tired wife in the front and 100 miles to reach home who pulls into a motorway service area looking for a snack, a chance to stretch his legs and top up with fuel.
The reality that faces him is that often there are queues stretching through the restaurant doors and out into the corridor, there is litter all over the floors and the meal is expensive and poorly served. Added to this he has to pay top rates for petrol, the lavatories are often dirty and there is a "couldn't-care-less" attitude among the staff.
The Minister has it in his power to do something about this. In reply to a parliamentary Question that I tabled, the Under-Secretary told me that it was a condition that the lessees should provide all the services specified in the lease to the satisfaction of the Secretary of State. Operators were required to provide good quality meals and refreshments at reasonable prices. The Minister's ideas of satisfactory meals, reasonable prices and good quality are very different from mine.
I hope that when he winds up the debate the Under-Secretary will explain more fully the standards he requires, and whether teams of inspectors look over these service areas. I understand that the inspectors do not have to look at all at the quality and condition of food. They look only at the physical aspects of the motorway service areas such as fire precautions, maintenance standards, and so forth.
I hope that the Government also will consider the whole question of the design of motorway service areas. Very often these areas are on exposed sites and the parking areas are a long way from the restaurants. In such cases the restaurant and the parking area are often divided by the access road, which presents a road safety hazard of considerable magnitude. The hallways and corridors are often poorly lit and dingy.
As regards the operators, there are a number of requirements the Government should demand. I believe, for example, that the Government should insist that motorway service areas take all major credit cards. There are some, for example, that do not take Barclaycards.
I am not so concerned that the Minister should have powers to control prices, but I believe that there should be opportunities for more competition among motorway service area operators. Perhaps the Minister would consider letting off the different sectors each side of the motorway to different companies. This would engender some form of competition.
The Minister has been promising the possibility of an inquiry into motorway service areas for some time. It has developed into a "now you see it, now you don't" situation. Today's edition ofThe Times said that there would be an inquiry. TheFinancial Times of 1st August said there was likely to be an inquiry. Last week the Minister said he was considering the need for an inquiry and hoped that a decision would not be too long delayed. He has been considering this need for four or five months. This is not speedy enough for an important, but relatively minor matter.
I hope that he will announce the setting up of an inquiry soon and will allow hon. Members to go to that inquiry and present letters from their constituents expressing dissatisfaction about the way in which motorway service areas are run. In this way I hope that we shall get some action on this vexed question.

9.30 p.m.

Mr. George Younger: If the Opposition had had any doubts about their decision to table this motion, those doubts would have been dispelled by the course of this debate. At no point in this debate so far have there been any straight or clear answers to the extremely well-put points advanced by my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) in his opening speech.
The key to this lies in the way the Secretary of State for Transport chose to tackle his task of answering the motion. I should like to have been a fly on the wall in his office when he was working out tactics. There are numerous ways of tackling a critical motion in the House when one is defending. One can decide to tell all and prepare for all the questions and have those answers ready, or one can spend one's time attacking the other side in the hope that that will deflect attention away from oneself, or one can

talk away, using as many long words as one possibly can, hoping that nobody will notice. The right hon. Gentleman chose to take the last course.
Although the Minister made a long speech and we were waiting all the time with bated breath to hear his answers to the weighty matters put to him by my hon. Friend, nothing came of it at all. However, halfway through his speech, he took refuge in the age-old tactic of saying "I shall ask my hon. Friend to reply to that matter later". Therefore, we all wait with keen interest for the speech of the Under-Secretary of State, because we feel that he and his Department between them will have cooked up the answers to my hon. Friend's charges.
We were delighted to have in this debate a truly marvellous example of that interesting parliamentary phenomenon known as the Liberal Party speech. This time the speech was made by the hon. Member for Truro (Mr. Penhaligon). We all know that Liberal speeches, by definition, aim at attacking both sides equally. These matters are carefully timed, but I think that on this occasion the hon. Gentleman carried things a little too far. It is not necessary to attack both sides on every argument in every sentence that is uttered. The hon. Gentleman's remarks, which gave great amusement, came to no conclusion on any point.
If it is helpful to the hon. Gentleman, perhaps I can ask him a question which is relevant and important. He said that he did not intend to support our motion. Does this mean that the Liberal Party is in favour of the further nationalisation of road haulage, since that clearly is the indication of the White Paper and of the Minister's speech? We should like to know the answer to that question, because if the hon. Member does not go into the Lobby with us tonight, everybody in the country, and road hauliers in their thousands, can take it that the Liberal Party agrees with the nationalisation policy.

Mr. Penhaligon: If the Conservative Party wins the next election it will probable carry out all the nonsenses that appeal to it, and if the Labour Party wins that election no doubt it will carry all the nonsenses that appeal to its members. If somehow we can juggle things around so that neither party wins, we might carry on with a successful course of action.

Mr. Younger: It was foolish of me to expect the hon. Gentleman to answer my question on road haulage. However, road hauliers throughout the country now have an answer.
I should like to comment briefly on some of the points made by the Secretary of State in his opening remarks before I deal with the general questions raised by our motion. This debate has been worth while in producing some response from the Minister in terms of firm decisions to be taken. The first related to Freightliners. I shall not pretend that it surprised any of us that the Minister came down as he did in handing over Freightliners to British Rail. We suspected that that might be so.
But there are two assurances that we must have as a result, and I hope that the Minister will be able to give them tonight, or as soon as possible. First, if Freightliners is to be handed over to British Rail, I hope that it will be clearly stated that the Freightliners organisation will be given a devolved position within British Rail. By that I mean that it should be given a clearly separate management and as much autonomy as possible within British Rail. We should be very grateful for assurances on that.
The second point flows from the first, but it is equally important. If that is to be the decision and if I can receive that assurance, we must also have a clear differentiation of accounting procedures so that we may clearly see what Freightliners' performance is in future, even when it is part of British Rail. That is terribly important for the confidence of the Freightliners organisation and the industrialists who will be using Freightliners so that they can see exactly what it is doing.
We had an interesting statement from the Minister, which was perhaps not altogether surprising in the light of other decisions he had taken, about private non-residential parking. There was some argument earlier about whether the proposals had been given adequate publicity. Here is yet another retreat from what the Government intended to do and what was being foreshadowed, albeit inadequately, in the White Paper.
The Minister may choose to forget some of the words of the White Paper if he

wishes, but paragraph 123, on page 27, clearly suggests that the Government intend to introduce provisions on private non-residential parking. That paragraph states:
the Government believes that an effective scheme is practicable.
Even though it is practicable, the Government have decided not to do it. I like to think that the Government have had to listen to some of the very strong objections to these proposals from my right hon. and hon. Friends and others outside the House and that they have decided to make yet another back-tracking on that policy.
Then there is the question of local decisions. There is much high-flown talk about how desirable it is to let shire councils and other local councils make their own decisions. No one can disagree with that sort of talk. Everyone says how good it is for local people to make these decisions, but we are deeply suspicious of the Government. Nothing that has been said today has wiped out the suspicion that their talk is really a cloak for hoping that the responsibility for these unpopular decisions on the closures of routes or whatever will be placed at the door of the councils rather than at the door of the Government and the transport users' consultative committees, as they are now.
It is all very well to try to pass over this responsibility, but I ask the Government to reflect on this. If they are finding it difficult to find enough money for the support of transport—they have admitted this—how is it likely that local councils will find it any easier? If the local councils at the same time are to have their rate support grant restricted by the Government's inevitable shortage of money, surely they will be unable to keep up certain rural transport services because they, too, cannot afford them. We must have some assurances for local councils that the Government will not shuffle off to them the responsibility for keeping alternative services going, under the cloak of saying "What a good thing it is to give local councils autonomy!".
Then there is the question of commuters, which was mentioned briefly by the Minister and by several of my hen. Friends, notably my hon. Friend for Leominster (Mr. Temple-Morris) and my hon. Friend the Member for Wellingborough


(Mr. Fry). What he said was correct. Nobody pretends that at a time of galloping inflation one can allow the railways to continue to make ever-increasing deficits without any alterations in fares.
Our complaint about the White Paper is that the Government's view stated there is that commuters must be given time to adjust to the alterations, yet we are facing steep increases for commuters in a month or two. The increases will be larger than those permitted in remuneration in the past year, and yet the increases will be made in January. We should like to know how this will tie in with the Government's stated intention to give commuters time to deal with fare increases.
One is tempted to ask oneself, if this is giving time to commuters to adjust, what on earth would it be like if they were not given time? There is no doubt that for many people who have no viable option but to travel to work by rail the increases—which will be larger than their wage increases—will be a severe burden.
We do not have time now to talk about ports which, as my hon. Friend the Member for Yarmouth (Mr. Fell) said, have not been properly discussed today. How-over, we are glad that the Government have at last—at least according to the White Paper—decided not to carry out their original intention of nationalising the ports as quickly as intended, or perhaps at all.
The motion seeks to criticise the Government for their conduct of transport policy generally and I want to conclude with a word on that. The motion covers the whole period of the Government since 1974. At that time, when this Government came into office, there were already various moves afoot. The decision that there should be no further major rail closures was, in fact, made by my right hon. Friend the Member for Yeovil (Mr. Peyton) and did not come out of this White Paper. The Government had before them in 1974 legislation that had been put in train by the previous Government.
There was, in particular, legislation intended to ease traffic licensing restrictions and so encourage innovation and new experiments in rural transport. The Government had the opportunity to put through that measure but clearly decided, as a matter of policy, not to do so. How-

ever we are now, three or four years later, finding the Government announcing with pride that they are about to bring in measures to do precisely that. If three and a half years of sheer wasted time is not a cause for criticism of the Government's transport policy, I do not know what is. The Secretary of State must have known that that accusation would be made tonight and could well have prepared himself to have answered it in his speech. He could have said a word about the delay but he did not, and that in itself is a good cause for the motion.
The Government came into power with certain manifesto commitments—and the manifesto is always a source of great interest to my hon. Friends and me. The Government had stated in their manifesto an intention to introduce an integrated transport policy. No doubt many people thought that that was a marvellous idea and they voted for this Government as a result. However, it is now made as clear as possible in the White Paper that that policy has been abandoned. No wonder the Labour Party Conference was a bit shirty on the whole subject!
There was also a commitment in the manifesto for not just a transfer of traffic from road to rail but "a massive shift". However, the White Paper makes clear that the Government realise that that is not practicable and that it will not be proceeded with.
There was also an oft-repeated and clearly stated set of proposals for further nationalisation of road haulage and ports. According to the White Paper, those plans now have a slightly more ambivalent future, because the wording is sufficiently soft to persuade gullible people, such as the hon. Member for Truro, that although the proposals are in the White Paper, they will not materialise and that there is a sporting chance that the proposals will not be in the next Labour manifesto. On the other hand, it is all there and in the unlikely event of another Labour Government being returned, they would be perfectly able to quote these proposals and to use them to proceed with the massive nationalisation of road haulage.
One of the strangest things about the debate is that we have had no mention of road haulage except for passing references in one or two Back Bench speeches. I wonder what those working in


the industry will think of that. They are going through an extremely difficult time. Many road haulage firms are going out of business. Indeed, one went out of business in my own constituency just the other day.

Mr. Adley: Is my hon. Friend aware of the row going on between the Transport and General Workers' Union Members opposite, whose membership work in road haulage, and the railway union Members, whose membership do not? Perhaps that is the answer to this question.

Mr. Younger: I am grateful for my hon. Friend's intervention. It would not be right to have a debate such as this without making clear that we appreciate the very difficult time that the road haulage industry is having with soaring costs, extra licensing charges, its exclusion by the Government from the 5p off petrol,—which reduction was a result of Conservative action in the summer—and increased bureaucracy, as well as the many other difficulties that are putting so many haulage firms out of business.
Whatever else may be said about the debate, the charges made by my hon. Friend the Member for Sutton Coldfield at the start have been amply justified. No answers have been forthcoming and unless the Under-Secretary can produce the answers now—which I very much doubt—I hope that my hon. Friends will willingly go into the Lobby to vote for the richly justified motion.

9.47 p.m.

The Linder-Secretary of State for Transport (Mr. John Horam): I am delighted to welcome the hon. Member for Ayr (Mr. Younger) to our debates, even though he slightly overran his time and has left me rather less time than I had expected to answer the points made in the debate. I understand the Opposition's difficulties in providing more than one speaker on transport matters. The Shadow Cabinet does not have very much interest in this subject, but we are delighted to welcome a spokesman on Scottish affairs doubling up on another subject.
Indeed, the Scottish scene gives us a good example of the excellence of Labour Party transport policies. This year we are celebrating the hundredth postbus in

Scotland. That is a tribute to the initiative and common sense of the Scottish people in taking the opportunities presented by the legislation of a Labour Government, namely, the 1968 Act. That is precisely the sort of pragmatic, effective and practical reform of the licensing laws that my right hon. Friend and I intend to continue in what we are attempting to do.
The Opposition have still not made a single significant change to the licensing laws of this country since the war. That is a situation that all their brave talk cannot deny.
I wish to give some of the straight and clear answers that have been requested of me. My right hon. Friend's decision on Freightliners has been widely welcomed. The Chairman of British Rail has assured my right hon. Friend that, if the House agrees to the transfer, he intends to build on the strength of the Freightliners company, retaining the characteristics of an independent profit centre and a high degree of delegated responsibility and authority. That means that we shall be able to see precisely its financial performance. I can therefore give the hon. Member for Sutton Cold-field (Mr. Fowler) both the assurances for which he asked.
The hon. Gentleman and my right hon. Friend both asked me to follow up a point made by the hon. Member for Daventry (Mr. Jones) in an intervention during my right hon. Friend's opening speech. I think that the hon. Gentleman was referring to the decision of the traffic commissioners in the Oxfordshire case.

Mr. Arthur Jones: No, it was a general comment on the Government's policy in respect of the National Bus Company and the authority that will be left with the county council.

Mr. Horam: As the hon. Gentleman should be aware, the traffic commissioners are independent. The National Bus Company, or any private operator, must present its case to them. If an operator is dissatisfied with the Endings of the commissioners, an appeal can be made to my right hon. Friend, who will give his judgment accordingly.

Mr. Arthur Jones: But what is the policy?

Mr. Horam: My right hon. Friend's policy is to deal with each case as it comes up, which is the practical way forward. The worst possible thing would be to take a particular ideological stand and apply it to all the different circumstances that exist throughout the counties.

Mr. Arthur Jones: Mr. Arthur Jones
rose—

Mr. Horam: The hon. Members for Leominster (Mr. Temple-Morris) and Wellingborough (Mr. Fry) talked about the problems of road maintenance. I have much sympathy with some of their remarks. Road maintenance expenditure has decreased progressively in the past three or four years. In the next financial year we have been able to accept for grant rather more than the total base bid by the authorities of approximately £407 million. That is about the same as is being spent this year. We have reached a plateau in road maintenance expenditure of approximately £407 million. It is a fairly sizeable sum, which indicates that the matters raised by the hon. Members for Leominster and Wellingborough are recognised. I say to the hon. Member for Wellingborough that we have provided £26·5 million more for local authority roads in the package introduced by my right hon. Friend the Chancellor of the Exchequer. That indicates that there is compared with our earlier expectations an upturn.
I can tell the hon. Member for Truro (Mr. Penhaligon) that we are monitoring with local authorities the state of road maintenance. That is to be a continuous programme. The Government are concerned.
My hon. Friends the Members for Edinburgh, Central (Mr. Cook), Crewe (Mrs. Dunwoody) and Leicester, East (Mr. Bradley) spoke mainly about the railway industry. I recognise their interest. I was struck by the comment of my hon. Friend the Member for Edinburgh, Central—namely, that the Opposition appear to be applying the American solution to the problems. The hon. Member for Sutton Coldfield made precisely that point. The Americans have allowed their rail and bus public services to decline to an extent where they have to be not merely adventurous but positively almost reckless in their attempts to get

ahead with their public transport policies They have reached that position because they have allowed their industries to decline to such a great extent. We do not intend that to happen here.
The hon. Member for Sutton Coldfield began by saying that his indictment was against successive Labour Governments and not specifically against my right hon. Friend and me. There is the clear implication that he cannot sustain his indictment against my right hon. Friend and myself, who are in charge of transport policy in the Government. That is the case that the hon. Member has to make, and he clearly has not done so. It says much that the hon. Gentleman, despite his forward-looking posture, had to spend all his time looking back to yesterday's team. It says much for the value that is to be attached to his own policy statement, which was issued about two months ago, that he almost failed to mention it this evening. So much for the positive statements that we have from the hon. Gentleman.
Once again, the hon. Member for Sutton Coldfield launched into a long saga of the difficulties that will befall any Government who try to operate bus licensing laws. So, too, did the hon. Member for Ayr, who attempted to reply on behalf of the Opposition. The hon. Member for Sutton Coldfield said that Labour Governments have said thousands of words and done precious little. What has the Conservative Party done? The right hon. Member for Yeovil (Mr. Peyton) produced a consultation document in 1971 containing brave words and ideological postures. They were not very determined ideological postures. If he was going to be ideological, the right hon. Gentleman might as well have been fanatically so. Two years later the Tories brought out a Bill considerably watering down the proposals in the consultation document. They proposed amendments in the other place which, yet again, watered down their own proposals. Such is the consistency—

Mr. Norman Fowler: rose—

Mr. Horam: No, I will not give way. Such is the consistency of the Opposition. The fact is that we have had no policy and no action on this issue from successive Conservative Governments,


whereas Labour has a clear record of achievement.
I come now to bus services. The policy document produced by the hon. Member for Sutton Coldfield states that
priority should be to repair the financial damage inflicted by a combination of Labour policy-making at both the national and local level".
That could not be further from the truth. It is the Labour Government and Labour-controlled councils who have supported bus services and Conservative Administrations who have neglected them. Each year the bus companies give their counties an estimate of the subsidy which will be required to maintain services for the following year. I do not say that bus companies should always be given the whole of what they require, but they must be given a reasonable proportion. Yet many counties, almost without exception Conservative-controlled, give a derisory amount.
This year the NBC received less than half the amount it asked for from Berkshire. In Wiltshire the figure was under half, in East Sussex it was one-third and in Oxfordshire nothing. This is bound to imply, unless the bus companies carry on bearing the losses—which is happening in some cases—fare increases above the going rate of inflation and service reductions.
Further, many Conservative-controlled councils do not even pay to the bus companies the resources which we have given them in respect of bus support. Last year bus companies received 15 per cent. less than we accepted, and this year the figure is 10 per cent. This is mainly in Conservative-controlled councils. Even more striking is the situation in local authorities where control changed from Labour to Conservative during the year.

In Northamptonshire, part of which the hon. Member for Wellingborough represents, bus support has been slashed by more than half. This, we are told, implies a reduction in bus mileage of over 10 per cent. Yet the hon. Member talked about anger in rural villages. This is his area, and this is what his colleagues are doing.

Mr. Fry: rose—

Mr. Horam: I cannot give way.

Mr. Fry: rose—

Mr. Speaker: Order. It is clear that the Minister is not giving way.

Mr. Horam: In Derbyshire, support has been cut by one-quarter and we are told that this implies a reduction in services of 9 per cent. as well as fare increases greater than the current rate of inflation.
The direct consequence of a Tory victory at the polls in the local elections is likely to be higher fares and poorer services for people in rural areas. That is not the case when Labour is in control. We see the realities of the situation. Wherever the Conservatives have been in power, almost universally they have been neglectful of public transport, while Labour Governments and Labour-controlled councils have a positive record of achievement.

Mr. Humphrey Atkins: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly,
That this House condemns the Government's handling of transport policy:—

The House divided: Ayes, 256, Noes 282.

Division No. 12]
AYES
[10.00 p.m.


Adley, Robert
Boscawen, Hon Robert
Carlisle, Mark


Aitken, Jonathan
Bottomley, Peter
Chalker, Mrs Lynda


Alison, Michael
Bowden, A. (Brighton, Kemptown)
Channon, Paul


Amery, Rt Hon Julian
Boyson, Dr Rhodes (Brent)
Churchill, W. S.


Arnold, Tom
Braine, Sir Bernard
Clark, Alan (Plymouth, Sutton)


Atkins, Rt Hon H. (Spelthorne)
Brittan, Leon
Clark, William (Croydon S)


Awdry, Daniel
Brocklebank-Fowler, C.
Clarke, Kenneth (Rushcliffe)


Baker, Kenneth
Brooke, Peter
Clegg, Walter


Banks, Robert
Brotherton, Michael
Cockroft, John


Bell, Ronald
Brown, Sir Edward (Bath)
Cooke, Robert (Bristol W)


Bennett, Sir Frederic (Torbay)
Bryan, Sir Paul
Cormack, Patrick


Bennett, Dr Reginald (Fareham)
Buchanan-Smith, Alick
Costain, A. P.


Benyon, W.
Buck, Antony
Critchley, Julian


Berry, Hon Anthony
Budgen, Nick
Crouch, David


Biffen, John
Bulmer, Esmond
Crowder, F. P.


Biggs-Davison, John
Burden, F. A.
Davies, Rt Hon J. (Knutsford)


Body, Richard
Butler, Adam (Bosworth)
Dean, Paul (N Somerset)




Dodsworth, Geoffrey
Joseph, Rt Hon. Sir Keith
Rees, Peter (Dover &amp; Deal)


Douglas-Hamilton, Lord James
Kaberry, Sir Donald
Renton, Rt Hon Sir D. (Hunts)


Drayson, Burnaby
Kellett-Bowman, Mrs Elaine
Renton, Tim (Mio-Sussex)


du Cann, Rt Hon Edward
Kershaw, Anthony
Rhodes James, R.


Dykes, Hugh
Kilfedder, James
Rhys Williams, Sir Brandon


Eden, Rt Hon Sir John
Kimball, Marcus
Ridley, Hon Nicholas


Edwards, Nicholas (Pembroke)
King, Evelyn (South Dorset)
Ridsdale, Julian


Emery, Peter
King, Tom (Bridgwater)
Rifkind, Malcolm


Eyre, Reginald
Kitson, Sir Timothy
Roberts, Wyn (Conway)


Fairbairn, Nicholas
Knight, Mrs Jill
Rost, Peter (SE Derbyshire)


Fairgrieve, Russell
Knox, David
Royle, Sir Anthony


Farr, John
Lamont, Norman
Sainsbury, Tim


Fell, Anthony
Langford-Holt, Sir John
St. John-Stevas, Norman


Finsberg, Geoffrey
Latham, Michael (Melton)
Scott, Nicholas


Fisher, Sir Nigel
Lawrence, Ivan
Scott-Hopkins, James


Fletcher, Alex (Edinburgh N)
Lawson, Nigel
Shaw, Giles (Pudsey)


Fookes, Miss Janet
Lester, Jim (Beeston)
Shelton, William (Streatham)


Forman, Nigel
Lewis, Kenneth (Rutland)
Shepherd, Colin


Fowler, Norman (Sutton C'f'd)
Lloyd, Ian
Shersby, Michael


Fox, Marcus
Loveridge, John
Silvester, Fred


Fraser, Rt Hon H. (Stafford &amp; St)
Luce, Richard
Sims, Roger


Fry, Peter
McAdden, Sir Stephen
Sinclair, Sir George


Galbraith, Hon T. G. D.
McCrindle, Robert
Skeet, T. H. H.


Gardiner, George (Reigate)
Macfarlane, Neil
Smith, Dudley (Warwick)


Gardner, Edward (S Fylde)
MacGregor, John
Smith, Timothy John (Ashfield)


Gilmour, Rt Hon Ian (Chesham)
MacKay, Andrew (Stechford)
Speed, Keith


Gilmour, Sir John (East Fife)
McNair-Wilson, P. (New Forest)
Spence, John


Glyn, Dr Alan
Madel, David
Spicer, Jim (W Dorset)


Godber, Rt Hon Joseph
Marshall, Michael (Arundel)
Spicer, Michael (S Worcester)


Goodhart, Philip
Marten, Neil
Sproat, Iain


Goodhew, Victor
Mates, Michael
Stainton, Keith


Goodlad, Alastair
Mather, Carol
Stanbrook, Ivor


Gorst, John
Maude, Angus
Stanley, John


Gow, Ian (Eastbourne)
Maudling, Rt Hon Reginald
Steen, Anthony (Wavertree)


Gower, Sir Raymond (Barry)
Mawby, Ray
Stewart, Rt Hon Donald


Grant, Anthony (Harrow C)
Maxwell-Hyslop, Robin
Stewart, Ian (Hitchin)


Gray, Hamish
Mayhew, Patrick
Stokes, John


Grieve, Percy
Meyer, Sir Anthony
Stradling Thomas, J.


Griffiths, Eldon
Miller, Hal (Bromsgrove)
Tapsell, Peter


Grist, Ian
Mills, Peter
Taylor, R. (Croydon NW)


Grylls, Michael
Miscampbell, Norman
Taylor, Teddy (Cathcart)


Hall-Davis, A. G. F.
Mitchell, David (Basingstoke)
Tebbit, Norman


Hamilton, Michael (Salisbury)
Moate, Roger
Temple-Morris, peter


Hampson, Dr Keith
Monro, Hector
Thatcher, Rt Hon Margaret


Hannam, John
Montgomery, Fergus
Thomas, Rt Hon P. (Hendon S)


Harrison, Col Sir Harwood (Eye)
Moore, John (Croydon C)
Thompson, George


Haselhurst, Alan
More, Jasper (Ludlow)
Trotier, Neville


Hastings, Stephen
Morgan, Geraint
van Straubenzee, W. R.


Havers, Rt Hon Sir Michael
Morris, Michael (Northampton S)
Vaughan, Dr Gerard


Hawkins, Paul
Morrison, Hon Peter (Chester)
Viggers, Peter


Hayhoe, Barney
Mudd, David
Wakeham, John


Heseltine, Michael
Neave, Airey
Walder, David (Clitheroe)


Hicks, Robert
Neubert, Michael
Walker, Rt Hon P. (Worcester)


Higgins, Terrence L.
Newton, Tony
Wall, Patrick


Hodgson, Robin
Nott, John
Walters, Dennis


Holland, Philip
Onslow, Cranley
Warren, Kenneth


Hordern, Peter
Oppenheim, Mrs Sally
Watt, Hamish


Howe, Rt Hon Sir Geoffrey
Page, John (Harrow West)
Weatherill, Bernard


Howell, David (Guildford)
Page, Rt Hon R. Graham (Crosby)
Wells, John


Hunt, David (Wirral)
Page, Richard (Workington)
Whitelaw, Rt Hon William


Hunt, John (Ravensbourne)
Parkinson, Cecil
Wiggin, Jerry


Hurd, Douglas
Pattie, Geoffrey
Winterton, Nicholas


Hutchison, Michael Clark
Percival, Ian
Wood, Rt Hon Richard


Irving, Charles (Cheltenham)
Peyton, Rt Hon John
Young, Sir G. (Ealing, Acton)


James, David
Pink, R. Bonner
Younger, Hon George


Jenkin, Rt Hon P. (Wanst'd&amp;W'df'd)
Prentice, Rt Hon Reg



Jessel, Toby
Price, David (Eastleigh)
TELLERS FOR THE AYES:


Johnson Smith, G. (E Grinstead)
Prior, Rt Hon James
Mr. Spencer Le Merchant and


Jones, Arthur (Daventry)
Pym, Rt Hon Francis
Mr. Michael Roberts.


Jopling, Michael
Raison, Timothy





NOES


Abse, Leo
Beith, A. J.
Brown, Hugh D. (Provan)


Allaun, Frank
Benn, Rt Hon Anthony Wedgwood
Brown, Robert C. (Newcastle W)


Anderson, Donald
Bennett, Andrew (Stockport N)
Buchan, Norman


Archer, Rt Hon Peter
Bidwell, Sydney
Buchanan, Richard


Armstrong, Ernest
Bishop, Rt Hon Edward
Butler, Mrs Joyce (Wood Green)


Ashley, Jack
Blenkinsop, Arthur
Callaghan, Rt Hon J. (Cardiff SE)


Ashton, Joe
Boardman, H.
Callaghan, Jim (Middleton &amp; P)


Atkins, Ronald (Preston N)
Booth, Rt Hon Albert
Campbell, Ian


Atkinson, Norman
Boothroyd, Miss Betty
Canavan, Dennis


Bagier, Gordon A. T.
Bottomley, Rt Hon Arthur
Cant, R. B.


Barnett, Guy (Greenwich)
Boyden, James (Bish Auck)
Carmichael, Neil


Bates, Alf
Bradley, Tom
Carter-Jones, Lewis


Bean, R. E.
Bray, Dr Jeremy
Cartwright, John







Castle, Rt Hon Barbara
Hunter, Adam
Perry, Ernest


Clemitson, Ivor
Irvine, Rt Hon Sir A. (Edge Hill)
Phipps, Dr Colin


Cocks, Rt Hon Michael (Bristol S)
Jackson, Colin (Brighouse)
Price, William (Rugby)


Cohen, Stanley
Jackson, Miss Margaret (Lincoln)
Radice, Giles


Coleman, Donald
Janner, Greville
Rees, Rt Hon Merlyn (Leeds S)


Colquhoun, Ms Maureen
Jay, Rt Hon Douglas
Roberts, Albert (Normanton)


Concannon, J. D.
Jeger, Mrs Lena
Roberts, Gwilym (Cannock)


Cook, Robin F. (Edin C)
Jenkins, Hugh (Putney)
Robinson, Geoffrey


Corbett, Robin
John, Brynmor
Roderick, Caerwyn


Cox, Thomas (Tooting)
Johnson, James (Hull West)
Rodgers, George (Chorley)


Craigen, Jim (Maryhill)
Johnson, Walter (Derby S)
Rodgers, Rt Hon William (Stockton)


Crawshaw, Richard
Jones, Alec (Rhondda)
Rooker, J. W.


Cronin, John
Jones, Barry (East Flint)
Roper, John


Crowther, Stan (Rotherham)
Jones, Dan (Burnley)
Rose, Paul B.


Cryer, Bob
Kaufman. Gerald
Ross, Stephen (Isle of Wight)


Cunningham, G. (Islington S)
Kelley, Richard
Ross, Rt Hon W. (Kilmarnock)


Cunningham, Dr J. (Whiteh)
Kerr, Russell
Rowlands, Ted


Davidson, Arthur
Kilroy-Silk, Robert
Ryman, John


Davies, Bryan (Enfield N)
Lambie, David
Sandelson, Neville


Davies, Denzil (Llanelli)
Lamborn, Harry
Sedgemore, Brian


Davies, Ifor (Gower)
Latham, Arthur (Paddington)
Selby, Harry


Davis, Clinton (Hackney C)
Leadbitter, Ted
Sever, J.


Deakins, Eric
Lee, John
Shaw, Arnold (Ilford South)


Dean, Joseph (Leeds West)
Lestor, Miss Joan (Eton &amp; Slough)
Sheldon, Rt Hon Robert


Dempsey, James
Lever, Rt Hon Harold
Shore, Rt Hon Peter


Doig, Peter
Lipton, Marcus
Silkin, Rt Hon John (Deptford)


Dormand, J. D.
Litterick, Tom
Silkin, Rt Hon S. C. (Dulwich)


Douglas-Mann, Bruce
Lomas, Kenneth
Silverman, Julius


Duffy, A. E. P.
Loyden, Eddie
Skinner, Dennis


Dunn, James A.
Luard, Evan
Small, William


Dunnett, Jack
Lyon, Alexander (York)
Smith, John (N Lanarkshire)


Dunwoody, Mrs Gwyneth
Lyons, Edward (Bradford W)
Spearing, Nigel


Eadie, Alex
Mabon, Rt Hon Dr J. Dickson
Spriggs, Leslie


Edge, Geoff
McCartney, Hugh
Stallard, A. W.


Ellis, John (Brigg &amp; Scun)
McDonald, Dr Oonagh
Stewart, Rt Hon M. (Fulham)


English, Michael
McElhone, Frank
Stoddart, David


Ennals, Rt Hon David
MacFarquhar, Roderick
Stott, Roger


Evans, Fred (Caerphilly)
McGuire, Michael (Ince)
Strang, Gavin


Evans, Ioan (Aberdare)
MacKenzie, Rt Hon Gregor
Strauss, Rt Hon G. R.


Evans, John (Newton)
Maclennan, Robert
Summerskill, Hon Dr Shirley


Ewing, Harry (Stirling)
McMillan, Tom (Glasgow C)
Swain, Thomas


Faulds, Andrew
McNamara, Kevin
Taylor, Mrs Ann (Bolton W)


Fernyhough, Rt Hon E.
Madden, Max
Thomas, Jeffrey (Abertillery)


Fitch, Alan (Wigan)
Magee, Bryan
Thomas, Mike (Newcastle E)


Flannery, Martin
Mahon, Simon
Thomas, Ron (Bristol NW)


Fletcher, Ted (Darlington)
Mallalieu, J. P. W.
Thorne, Stan (Preston South)


Foot, Rt Hon Michael
Marks, Kenneth
Thorpe, Rt Hon Jeremy (N Devon)


Ford, Ben
Marshall, Dr Edmund (Goole)
Tierney, Sydney


Forrester, John
Marshall, Jim (Leicester S)
Tinn, James


Fowler, Gerald (The Wrekin)
Maynard, Miss Joan
Tomlinson, John


Fraser, John (Lambeth, N'w'd)
Meacher, Michael
Tomney, Frank


Freeson, Rt Hon Reginald
Mellish, Rt Hon Robert
Torney, Tom


Freud, Clement
Mendelson, John
Tuck, Raphael


Garrett, John (Norwich S)
Mikardo, Ian
Urwin, T. W.


Garrett, W. E. (Wallsend)
Millan, Rt Hon Bruce
Varley, Rt Hon Eric G.


George, Bruce
Miller, Dr M. S. (E Kilbride)
Wainwright, Edwin (Dearne V)


Gilbert, Dr John
Mitchell, Austin
Walker, Terry (Kingswood)


Ginsburg, David
Molloy, William
Ward, Michael


Golding, John
Moonman, Eric
Watkins, David


Gould, Bryan
Morris, Alfred (Wythenshawe)
Watkinson, John


Gourlay, Harry
Morris, Charles R. (Openshaw)
Weetch, Ken


Grant, John (Isington C)
Morris, Rt Hon J. (Aberavon)
Weitzman, David


Grocott, Bruce
Moyle, Roland
Wellbeloved, James


Hamilton, James (Bothwell)
Mulley, Rt Hon Frederick
White, Frank R. (Bury)


Hamilton, W. W. (Central Fife)
Murray, Rt Hon Ronald King
White, James (Pollok)


Hardy, Peter
Newens, Stanley
Whitehead, Phillip


Harper, Joseph
Noble, Mike
Whitlock, William


Harrison, Rt Hon Walter
Oakes, Gordon
Willey, Rt Hon Frederick


Hattersley, Rt Hon Roy
Ogden, Eric
Williams, Rt Hon Alan (Swansea W)


Hatton, Frank
O'Halloran, Michael
Williams, Alan Lee (Hornch'ch)


Hayman, Mrs Helene
Orme, Rt Hon Stanley
Williams, Sir Thomas (Warrington)


Healey, Rt Hon Denis
Ovenden, John
Wilson, Alexander (Hamilton)


Heffer, Eric S.
Owen, Rt Hon Dr David
Wilson, Rt Hon Sir Harold (Huyton)


Hooley, Frank
Padley, Walter
Wilson, William (Coventry SE)


Horam, John
Palmer, Arthur
Wise, Mrs Audrey


Howell, Rt Hon Denis (B'ham, Sm H)
Pardoe, John
Woodall, Alec


Hoyle, Doug (Nelson)
Park, George
Woof, Robert


Huckfield, Les
Parker, John
Wrigglesworth, Ian


Hughes, Rt Hon C. (Anglesey)
Parry, Robert
Young, David (Bolton E)


Hughes, Mark (Durham)
Pavitt, Laurie
TELLERS FOR THE NOES:


Hughes, Robert (Aberdeen N)
Pendry, Tom
Mr. Peter Snape and


Hughes, Roy (Newport)
Penhaligon, David
Mr. Ted Graham.

Question accordingly negatived.

PRICE CODE

10.15 p.m.

The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley): I beg to move,
That the Counter-Inflation (Price Code) Order 1977, a copy of which was laid before this House on 28th July, in the last Session of Parliament, be approved.
Tonight we are discussing a Statutory Instrument which although both shorter and simpler than orders in previous years is nevertheless long and complicated. I understand that the Select Committee on Statutory Instruments, reporting at 3 o'clock this afternoon, advocated the consolidation of prices legislation in order that such Statutory Instruments could be understood better and debated more clearly.
I fear that the first four lines in tonight's order, which refer to four Acts of Parliament, confirm the wisdom of the Select Committee's judgement. The work on consolidating prices legislation is now in hand. It is not for me to say when or, indeed, whether time can be allocated for the new consolidating Bill, but, with respect both to the Chairman of the Committee and to the Leader of the House, I confirm the need for a consolidating Bill to pass through its stages in order that we can debate these things with greater ease.
One of the problems with the complexities of orders such as this is that it encourages the weak-minded to discuss the subject in wild generalities rather than to concentrate on the contents of the order itself. I shall at least try to avoid that error by confining myself to a brief attempt to fit tonight's order into the context of the Government's inflation policy, followed by an equally brief description of the major provisions of the order itself.
The statutory prices policy, of which this Order is only a part, is only one element of the Government counter-inflation strategy. As I have repeated at the opening of every prices debate, the Government understand perfectly well that inflation cannot be abolished by Act of Parliament. That objective can only

be achieved, is being achieved and will continue to be achieved, by the application of the right economic policies.
The objective of a statutory prices policy is to augment rather than implement the main thrust of our counter-inflation intentions. The principal duties of the Price Commission, whose powers are in part determined by the order we are debating tonight, are intended to impose and encourage restraint on specific companies in specific cases. The Commission is particularly supposed to do that when unreasonably high prices are the result of monopoly or quasi-monopoly situations.
Tonight, however, we can consider only one of the Price Commission's powers. Its most important functions are permanent and do not need annual renewal. The future tasks of the Price Commission after this year will not require an order of this sort to be submitted to the House. These future tasks, the principal and permanent duties of the Price Commission, come under two headings. The first is the investigation of proposed price increases, if appropriate freezing the price while the investigation is carried out, and recommendation on the basis of that investigation of a continued price freeze if that seems to be right under the terms of the Act.
The second task of the Price Commission is the examination, at the invitation of the Secretary of State of the day, of prices in whole industrial sectors and the subsequent recommendation on the basis of the examination of the appropriate price level in that sector.
These major powers are permanent but, unlike them, margin control, or controls over profits—the direct subject of our debate tonight—is temporary. Indeed, it could hardly be more temporary, because we are simply asking for its continuation for a single year. We cannot come to the House next year and ask for an extension of margin control without a new Act of Parliament, because the Price Commission Act which was passed by this House in July of this year makes provision for margin control to last only until the last day of July 1978.
The last day of July 1978, therefore, marks the end of a Price Code in the


full meaning of that term, the full meaning being a formula applied universally—some would say arbitrarily—to all companies for the cost control element which has been part of the Price Code since it was introduced by the previous Conservative Government five years ago. It was not continued in the Price Commission Act. We have been anxious to move on to powers which as well as being permanent are more flexible, but the transition towards them requires a continuation of margin control for one more year.

Mr. Ron Thomas: Does not my right hon. Friend agree that under the Price Code there have been so many gateways that it has probably led to price increases rather than a restraint of prices?

Mr. Hattersley: I do not think that it can be described in such extreme terms, but I have agreed with my hon. Friend in the past and I agree with him today.
The sort of price policy that we want to see is best not operated according to a formula which is either operated at such a low level that companies which should be excluded are included or is operated at such a high level that companies which should be included are excluded. It is because of that that we introduced and eventually, after a little difficulty, carried the Price Commission Act.
The legacy of the old policy which comes up for one more year is margin control. This operates in two ways. The first way is that net profit margins must not exceed their reference levels—which is the margin of the best year since 1968—and gross percentage margins in a 12-month period must not be more than 90 per cent. of gross percentage margin in the last complete accounting year before April 1973. This year, in this order we have made adjustments to those two concepts of margin control to accommodate small firms, to allow for changes in direct taxes and to encourage investment.
I shall give a brief description of the five major changes in margin control which alter the position which the House confirmed a year ago. Paragraph 23 of the order allows for an increase in the immediate profit margin reference levels to the existing 12½ per cent. on return on capital and to 3 per cent. on turnover.
Paragraphs 28 and 29 change the way in which companies may calculate their interest charges. In 1976, companies were able to choose whether they wished interest charges to be included in margin control calculations. They were told then that they must make that choice once and for all. Under the order, they will be able to reverse that decision and include or exclude interest charges according to their judgment.
Paragraph 34 influences the conditions and changes the position of the net profit margin safeguard for distributors. It modifies the rules to the advantage of distributors. Distributors whose net profit margins are below 85 per cent of their reference levels are permitted gross margin ceilings 15 per cent. in excess of their base levels.
There are two other changes. The first is contained in paragraph 5, which alters the number of exclusions from margin control. The second is in paragraph 44, which extends investment relief to payments made for the acquisition of existing industrial buildings, shops or warehouses.
I wish to make a final comment about a different part of the order concerning the final power which the order confers—the so-called pay sanction. The pay sanction operates in a simple and limited way. When there is a breach of established pay policy and wages are paid in excess of that policy, what is paid in those wages may be deducted from the costs which companies include in their calculation of profit margins.
I say that that is the case if there is a breach of established pay policy. By "established pay policy" I mean pay policy set out in a White Paper as is required by the parent Act. The annexe to the White Paper "The Attack on Inflation" of July 1977 is, therefore, the one item of pay policy which can be subject to the sanction in this order. It is the 12-month rule as endorsed by the TUC. That is the only area where the pay sanction can apply, and it is neither the wish nor the intention of the Government to use present policy as an extension of the sanctions within that order.

Mr. Norman Atkinson: My right hon. Friend has now announced a statutory pay policy in relation to the 12-month rule, nothing else. That rule is the basis of a statutory policy.

Mr. Hattersley: That is not the case, for two reasons. First, there is no automatic sanctions to apply the 12-month rule. The sanction applies when the Secretary of State for Employment issues a certificate saying that he wishes margin control to be followed as a result of that. Secondly, there is no statute, as there was under the pay policy itself, which says that the 12-month rule must be adhered to and that anyone who breaches the rule is in some way in conflict with the law. All that can happen in those conditions is that when a company breaches the 12-month rule it may find that margin control regulations are working against it more severely than had the rule been observed.
Much as I would regret it happening, if a company were to pay an increase within 12 months, as long as it were prepared to have its margin control calculations excluded, the additional payments it made before the 12 months were out could be made. There would be no law to prevent the company doing that. That is the fundamental difference between what I have described tonight and a statutory policy.

Mr. Giles Shaw: Will the Secretary of State be more specific than the vague generalities he has quoted? Surely, the whole basis of one small part of the Remuneration, Charges and Grants Act was a specific statement that an additional wage settlement within 12 months would be contrary to statutory wages policy, and, therefore, this order would be invoked if there were an additional settlement, even if the company determined that it might sacrifice a portion of its profit margin to make that happen.

Mr. Hattersley: No, the sanction I have described is not an automatic sanction. It is invoked on the certification of the Secretary of State. In practice, that would be the Secretary of State for Employment, although there is the legal provision that all Secretaries of State are one and indivisible, and, therefore, in theory it could be any Secretary of State. The process, however, needs that trigger to set it off. It is not statutory in the sense that paying within 12 months is not illegal. Anybody who pays in less than 12 months may, and I hope usually will, accept that that additional payment should be disregarded

when margin control is calculated. That is not at all the same as a statutory prohibition.

Mr. Atkinson: My right hon. Friend should be clear about this. He is saying that the Secretary of State for Employment is statutorily obliged to intervene in the event of a firm paying at an interval of less than 12 months from the previous pay award.

Mr. Hattersley: No, I am not saying that. I do not know how anyone could believe that I had said that. When my hon. Friend the Member for Tottenham (Mr. Atkinson) readsHansard, he will discover that I did not say that. I said that it was within the discretion of the Secretary of State to intervene. Since I share the TUC's view that the 12-month rule is important for the transition from pay policy to free collective bargaining, I would expect that if the 12-month rule is breached the Government will use the power to back up what the TUC regards as right. There is no obligation on the Secretary of State to do it automatically. If there were, there would be no need for the Secretary of State to intervene.

Mr. Giles Shaw: If a manufacturer so wishes, he can increase the wages of his workers several times within 12 months provided that he does not thereby incur a price increase application. Is that what the right hon. Gentleman is saying?

Mr. Hattersley: First of all, I am saying that this is highly unlikely because the TUC will not wish its member unions to adopt such a frivolous and irresponsible policy. Were that to happen, however, a manufacturer clearly could increase his prices within 12 months without incurring an automatic legal prohibition. Were he to do so, however, he might well find—I emphasise the words "might well find", because there is nothing automatic about this—that the Secretary of State for Employment issued a certificate saying "Since the 12-month rule has been breached, the amount of money which has gone to pay the wage increases within 12 months shall not be adjudged an appropriate cost to be set against income for margin control calculations." It is no more and no less than that. I do not think that I can be more specific about it than I have been.

10.31 p.m.

Mrs. Sally Oppenheim: I am sure that we are all very much obliged to the Secretary of State for defining so carefully the difference between a statutory sanction and a legal prohibition. I do not know whether he has found this definition in any of the law books he has studied, but he might care to take a lesson from his hon. Friend the Minister of State, who had to give him tuition throughout most of the stages of the Price Commission Bill concerning legalities.
The House will have been very interested to learn that this is very much a discretionary power as far as the Secretary of State for Employment is concerned. Therefore, as far as a company is concerned—if we are to take seriously what the right hon. Gentleman has said—it depends which side of the bed the Secretary of State for Employment gets out of that morning. If it is the right side, he probably allows the breach of the 12-month rule to go through. If it is the left side, he does not.
That is possibly a question of semantics. But now we have had the Secretary of State's own authority for the fact that this is a discretionary power on the part of the Secretary of State for Employment. I hope that the House has noted that very carefully.
We were also very interested to hear the Secretary of State say that certain weak-minded people often like to develop generalities in debates of this nature. He then went on to give us one of his ponderous pronouncements about inflation. We were very interested to see that this weekend he had been making more of these and to read in theDaily Mail of Saturday 19th November:
But Mr. Hattersley said in Devizes
—about the inflation figure—
that this figure still reflected the troubles of last winter. Then he set out to prove that inflation was really down to single figures. He said: 'Encouraging as it is, October's figure does not indicate the low rate at which inflation is running today. A generally accepted method of measuring the current inflation rate is based on increases in the previous six months.'
I find that a particularly interesting statement from the Secretary of State, because on 7th February, in answer to a Question from my hon. Friend the Member for Romford (Mr. Neubert), the right

hon. Gentleman, referring to the Chairman of the Price Commission, said:
If he did mention a … increase … as a result of extrapolating the six months to the end of November and the six months following that. That is a wholly unreasonable statistical exercise to enter into, and therefore invalidates the … figure."—[Official Report. 7th February 1977; Vol. 925, c. 1030.]
Therefore, we can now take it that his figure has been totally invalidated.
However, to return to the narrow confines of the order, there is an inevitable air ofdéjà vu in any Price Code debate on which one embarks. The Price Code has been resurrected on so many occasions since its natural life ended. It has become a total anachronism. On several previous occasions we have been promised, as we have been promised tonight, that we were embarking on the final stages of the Price Code. Each time those promises have been rendered worthless and the code has been resurrected yet again.
The right hon. Gentleman's precedessor, as long ago as 1975, said in a debate on 16th October:
we took powers under Section 2 of the Remuneration, Charges and Grants Act to extend by order price control powers to the end of July 1976 and, if absolutely necessary, to the end of July 1977."—[Official Report, 16th October, 1975; Vol. 897, c. 1670.]
More, recently, on 7th July 1976, the right hon. Lady said:
The House is well aware that what we are looking at is the final stage in a price code that was inherited by this Administration."—[Official Report, 7th July 1976; Vol. 914, c. 1378.]
The Price Code was never intended to be anything more than a short-term measure, but it has had almost the nine lives of the proverbial cat. Successive resurrections of the code have resulted in similar arguments being advanced against it. One is driven to the conclusion that there is not anything new under the sun to say about the Price Code.
But never before have we been more entitled to express our concern. We do not think that the code should be extended another year. Earlier this year, when we were debating the Price Commission Bill in Committee, the Secretary of State made it absolutely clear that not only was the final date for the Price Code


to be 1st August 1978 but that its existence between now and then was to be conditional. He said on 24th May:
I am implying that the sort of margin control that we envisaged for 1st August onwards would be impossible were there not another wage round. It would be a burden on industry which it could not reasonably be expected to bear."—[Official Report, Standing Committee B, 24th May 1977; c. 564.]
There are those who would argue that the Government have not got the wage round to which the Secretary of State was referring. We know from the newspaper reports that the average rate of settlement is very substantially above the Government's target levels. In some cases this has occurred because of "phoney" productivity deals, and in some cases it has occurred because the Government's 10 per cent. ceiling has become a floor.
We know that there has been one case in which both the 10 per cent. guidelines and the 12-month rule have been breached with the Government's blessing. The situation has predictably arisen out of the inevitable stress caused by a period of strict control. I have no intention of going into the rights and wrongs of any particular settlement. I simply make the point that the pay round envisaged in the speech of last May is seen by many not to exist at all, or to exist only to a limited extent. Therefore, we might expect the Secretary of State to be as good as his word and not impose upon industry another burden which, to use his own words, it cannot reasonably be expected to bear. He has done so, and he has extended margin control for another year.
On this occasion we can be more confident that this will be the code's last appearance, because by next August it is unlikely that the Labour Party will still be in Government.

Mr. Mike Thomas (Newcastle-upon-Tyne, East): Perhaps the hon. Lady can explain whether she is glad or sorry about the breach of the pay guidelines. Do not industrialists who breach the guidelines bring it upon themselves?

Mrs. Oppenheim: I am sorry for the Government. They are supposed to have a pay policy, and the country can see that they have not got one. I predicted that it would come about, and my predictions have been proved right. Industrialists who breach the pay policy know

what they are doing in their own companies, but perhaps they are not entirely free. There is a sanction or semi-sanction against them in this order.
The sanction of margin control is serious. We are concerned by the erosion of profitability as a result of the strict controls in 1974–75 coupled with the pay explosion and with the sort of levels of profitability existing throughout British industry today, so that we can only view a measure of this kind with very great alarm.
It is not without significance that In every investigation embarked on by the Price Commission so far an interim price rise has been allowed because otherwise the company would have fallen below the safeguarding margin. This serves both to illustrate the extent to which profitability has fallen throughout British industry and to highlight the irrelevance of the Price Commission's counter-inflation activities.
But it has to be argued on the other hand—and I like to be fair and show both sides—that, if the right hon. Gentleman's extravagant claims for the Price Commission are remotely justified, margin control automatically becomes superfluous. At a time when the Chancellor of the Exchequer is wringing his hands about lack of investment, it seems the height of folly to introduce a measure of this kind, which can only depress investment further.
In the debate on the Queen's Speech the Secretary of State for Trade acknowledged that the level of profitability in British industry was far too low, but he complained that investment was not taking place despite an adequate cash flow and adequate liquidity. What he, the Chancellor of the Exchequer and the Secretary of State are unable to grasp is that companies will not invest, no matter how much cash is available, if the return on investment is not adequate—and it certainly is not adequate now within British industry.

Mr. Ron Thomas: Will the hon. Lady explain why under the Tory Government, with high levels of profitability, which presumably gave British capitalists all they wanted, the level of capital investment in Britain continued to decline?

Mrs. Oppenheim: I can answer that with a quotation from the words of Mr.


Ron Halstead of Beecham Products, speaking at the CBI conference:
The effect of the Price Code on British industry has been well nigh catastrophic. Between 1972 and 1976, during the duration of the first Price Code, company profits fell 40 per cent. and the real return on capital invested dropped from 8·9 per cent. to 3·5 per cent. compared to over 10 per cent. in the mid 1960s.
Would the Secretary of State invest his savings—I do not know whether he has any, but he jolly well ought to have on his salary—to see a return of only 3·5 per cent.? He would be foolish if he did. I invite him to say how much extra profitability this version of the code will allow over last year's code and how much that sum would have been if there had been no code at all.
Above all, I ask the right hon. Gentleman what possible justification there can be for the continuance of margin control when the former Chairman of the Price Commission made it crystal clear that margin control has had a negligible effect on prices in the past five years. One does not need to tell that to housewives in the shops, because they have seen it for themselves.
The continuation of the code for a further year is an expensive concession in what has the appearance of a one-sided bargain. For the next eight months we shall have a system of price controls, while any limitation on pay is highly speculative. It is not a quid pro quo we are seeing but a quid pro nihil, or, in the right hon. Gentleman's vernacular, "owt for nowt." It means that until 1st August next year companies will have the double burden of margin control and the inequities and uncertainties of the Price Commission Act. It could be claimed that this will be one of the most difficult years for industry—and it is a year when everybody realises that there is an urgent need to stimulate investment and job creation.
The right hon. Gentleman said that one of the effects of the new code will be to reduce the need for companies to conform to a rigid bureaucratic requirement. But they will still have to keep records, make regular reports and comply with pre-notification requirements. Indeed, it has been represented to me that the regulations under the Price Commission's new code are more onerous than under the old code. Because the implications are greater,

more senior members of management have to become involved in the preparation of information at considerable cost.
However, it would be less than fair to allow this debate to go by without acknowledging that what we are debating is a relaxed form of the previous Price Code for manufacturers and that there has been a substantial improvement in investment relief. It is, however, manifestly unfair that distributors should be left with the full rigours of price controls. Since they are the major employers of school leavers it is absurd that they should be singled out in this way.
Perhaps the supreme irony of the debate is that it is taking place about four months after the code that we are now debating became operational. So much for the parliamentary accountability that we were promised so often during consideration of the Price Commission Act. As a result, we are debating an order with only about eight months to run, which is a futile exercise.
All hon. Members, whether in favour of the order or against it, will agree that retrospective debates of this kind are most unsatisfactory.
We do not like the measure. We do not think that it should have been extended for another year, particularly on the spurious premise on which it has been done. We believe that the continuation of price control is unfair and damaging and, above all, that it will have no effect on prices. We want our disapproval to be clearly on the record.
Even more regrettable is the fact that it is becoming more likely every day that by the end of next year prices and unemployment will be rising again fast, and measures such as this can only distort the former and exacerbate the latter.

10.46 p.m.

Mr. Ron Thomas: I was waiting for the hon. Member for Gloucester (Mrs. Oppenheim) to tell us exactly what Tory Party policy was on prices. The last time the hon. Lady spoke in the House, she would have had us believe that she would like prices to be fixed in some kind of nineteenth-century open market in Gloucester. The world is not like that any more. The position is that a small number of British and multinational companies control the prices of most of the goods and services in this country. But all that the Tories


can tell us is that the way to deal with that position is to have effective competition, as if we were living in the nineteenth century.
There seems to be a basic contradiction in what the hon. Lady said. First, she told us that someone at the CBI had said that the Price Code had been a catastrophe and that it had been so rigid and profits had been so limited that firms had been unable to make any investment. On the other hand, we are told that the margin control was negligible over prices, One can it have it both ways. Either the code had some control over prices and, therefore, profits, or it did not. If it had no control over prices, presumably profits were much higher than they would otherwise have been. One should not quote the kind of nonsense that was trotted out at the CBI conference.

Mr. Tim Smith: Would not the hon. Gentleman agree that as the Price Code consists of a series of arbitrary rules it could have a different effect on different companies, and that that explains how it is possible to have these two different circumstances?

Mr. Thomas: No doubt the gateways under the Price Code would have a different effect on different companies. Capital-intensive and labour-intensive firms were differently affected. But the CBI represents the major manufacturing firms, the bigger firms in our economy, and those are the kind of firms that have driven a coach and horses through the Price Code. Ever since the beginning of the Price Code set-up, I and some of my hon. Friends have insisted that it was has in no impact on prices. I know that in his heart of hearts my right hon. Friend the Secretary of State knows that as well. But he had to take over the policy and go along with it and try to make us believe that it had an effect on prices.
The Price Code had no real controlling effect on prices because there were so many gateways, so many ways in which firms could demand price increases. I am willing to admit that it is the larger firms—those with the skilled accountants and all the rest—that continue to look at the check list and see how they can put up prices under this or that heading, under capital investment, stock relief, inflation accounting and so on. They led to con

siderable price increases right across the board. They also led to the rather interesting situation—about which hon. Members have not said enough—in which it is openly admitted that the consumer pays for investment.
The Tory economic analysis still is that it is the innovating entrepreneur who invests his savings—having worked in the coal mines and saved for 30 to 40 years—and who, with his little bit of capital, starts off a firm. The Tories say that when he wants some money he then issues some shares, and because the shareholders take certain risks they are therefore entitled to dividends. That is no longer the case.
If a firm wants to renew its capital investment or expand, it charges the cost to the consumers. They are the ones who pay for the investment. This is a major argument behind why we say that the consumers should own the companies because they are paying for the capital invested. On previous occasions the Minister has admitted that firms are allowed to increase prices for that reason—and then firms which would have invested in any case are allowed to invest their surpluses overseas. About £2,000 million is invested overseas annually.
In considering whether the Price Code is effective, one should remember that the Minister who is responsible has admitted that the last relaxation meant a transfer of £1,000 million from the consumer to the corporate sector.
No doubt several other hon. Gentlemen wish to speak, so I shall come to my final point. The Opposition spokesman tonight should tell us what is the Opposition's policy on prices. In listening to the hon. Member for Gloucester in the past, I have been able to conclude that they do not accept any form of price control whatsoever, no matter how effective. If the Opposition are opposed to any form of price control, they should stand up and say so. They should have the courage to do that. I am opposed to any kind of wage control and I say so again and again.
I now want to refer to the wage control aspect of the matter. When we debated the 12-month rule with the Secretary of State for Employment, there was, to a certain extent, a fast one pulled on us, especially in relation to the rule and the 10 per cent. guideline. It may be that I


am a bit thick, but I did not imagine during that debate that the Government would use all kinds of powers to stop firms from making legitimate pay awards of over 10 per cent.
Many of my hon. Friends have said that if the Government have such powers they should use them to get planning agreements. The Government seem reticent to do that, but they are quick to use their powers to stop firms paying more than 10 per cent.

Mr. Nicholas Ridley: Is it not strange that the Government should use their powers to grant export credit—a power that was granted by Parliament to make sure that only good risks were backed—as a discipline against firms which pay more than 10 per cent.? Is that not a misuse of powers?

Mr. Thomas: That may be the only point on which I shall ever agree with the hon. Member. I certainly entirely disagree with the Government using any of their powers to interfere in a freely negotiated collective bargaining arrangement.
I am still concerned about Part VIII of the document. Let us consider a firm such as ICI which is capital-intensive; the wage costs per unit of output are 1 per cent. or less. Like so many other companies, ICI is making massive profits and it could increase wages by more than 10 per cent. provided that it did not ask for a price increase to offset all or part of the cost of doing so. This clearly means that some groups of workers will be treated differently from others. Workers in labour-intensive firms will have no chance of getting increases above 10 per cent. because price increases would be needed to offset the cost. This sort of discrimination is unacceptable.
The same sort of thing applies with the 12-month rule. A certificate may be issued by the Secretary of State for Employment, but a firm which breaches this rule can get away with it if it does not seek an increase in prices to cover the cost.
There are so many gateways in the Price Code that such firms will find ways through it. This injects a level of discrimination that I find unsatisfactory. I should like a clear assurance from the Minister who replies that the Govern

ment are not using the code to try to stop freely-negotiated wage increases of more than 10 per cent.

10.57 p.m.

Mr. Tim Smith: The hon. Member for Bristol, North-West (Mr. Thomas) made some interesting observations. He said that consumers would be better off if they owned some of the businesses that are putting up prices to pay for investment, but I am not sure that consumers are happy with some of the businesses they own already. British Rail, for instance, is due to increase its prices on 1st January.
I find the timing of the debate odd. The order came into operation on 1st August. There was a consultative document in July, but it would have been much better if we had had this debate four or five months ago. Our comments may be noted, but they are unlikely to be incorporated into the order as amendments.
The hon. Member for Bristol, North-West said that the Price Code had had no effect on prices. The rigid rules of the code have undoubtedly encouraged firms to increase their prices whenever "allowable costs"—a phrase from previous codes—justified an increase. Some companies applied automatically every three months.
In the debate on last year's corresponding order, the Secretary of State said that there was a difference of about £100 million in a full year between price increases notified to the Price Commission and those that were taken up subsequently. That statistic is misleading, because many companies were simply applying for price increases because they were entitled to one under the code, and for no other reason.
In last year's debate the Secretary of State said that the code which ended on 31st July this year would continue to check inflationary price increases. I contend that it has not been possible to estimate accurately how the code has operated and whether it has had that effect, but I very much doubt whether it has. I should be interested to know the Government's estimate of the effect of the last code.
The new code incorporates the same basic contradictions of profit margin control by reference to historic levels. This


follows the practice of previous codes and it is this formula that has produced the uneven effect on prices that we have seen. I do not agree that the codes have had no effect on prices; they have had an uneven effect.
The historic level for some companies can go back nearly 10 years to 1968–69, since the formula applies to the two best years of the five years before 1973. The consequence is that it has been possible for companies that at that time had historically high profits to be protected by the code, and at the same time for companies that had historically low profits at that period—it was a matter of chance because it happened to be that period that was selected—to have been given little relief. Indeed, they are accorded little relief in the new order. The 12½ per cent. safeguard on capital employed has not been increased although the 2½; per cent. safeguard on turnover has been increased by a small amount, namely, by ½ per cent. to 3 per cent.
It seems that there is a basic inconsistency between profit margin control and the Price Commission Act 1977, which in Section 2(2)(c) refers to the
need to earn
profits
which provide a return on the capital … to defray the cost of the capital … and to encourage the promotion of, innovations and technical improvements in and the expansion in the United Kingdom of the enterprises …
In other words, there is a conflict between the need to encourage investment and the continuing controls under the order.
The net profit margin control has been the subject of considerable relief in previous orders, especially the 1976 order, which introduced stock relief and relief for depreciation. However, when comments were invited on the consultative document a number of accountants felt that the multiple of 1·4 was was sufficient to counter the substantial effect of inflation on the replacement cost of capital equipment. It was suggested by the consultative committee of accountancy bodies that it should be 1·7. The 100 Group accountants, accountants working in industry who have a better knowledge of these matters thought that the factor should be 2·1. I am sorry that there was no room for improvement in that respect.
Gross profit margins are still the subject of control. There has been little relief for distributors. They were subjected originally to a situation in which they had not merely to comply with 100 per cent. of their historical margin but to bring their margins down to 90 per cent. The only relief that they have been granted since then is the introduction of stock relief provision. The effect of the control can still be vicious. I am sorry that there is not more scope in the order to deal with that problem.

11.4 p.m.

Mr. Mike Thomas: As usual, the hon. Member for Gloucester (Mrs. Oppenheim) contrives to have it both ways. As my hon. Friend the Member for Bristol, North-West (Mr. Thomas) drew to our attention, the hon. Lady says that the code is strict and imposes a damaging control, yet in the same breath she says that it has no effect on prices. That is the sort of argument to which we have become accustomed in these late-night debates. The hon. Lady has now been riding these two horses for so long that she is in great danger of doing herself permanent damage. I counsel her against taking that course permanently.
I must tell the hon. Lady and the hon. Member for Ashfield (Mr. Smith) that they let the devil's tail slip out from underneath the cloak or blanket. If on a three-monthly timetable a company is to be permitted to apply immediately for an increase under the code and to increase its prices on the basis that its allowable costs have increased, that does not say much for the much-vaunted competition that in Tory ideology is supposed to take the code's place.
Anyone would think after listening to Conservative Members that they had nothing to do with any Price Code at any time. One would think that they would like nothing more than to have no form of price control. As my hon. Friend the Member for Bristol, North-West said, it was the Conservatives who thought out the most disreputable parts of the idea. It is the belief of many Labour Members, myself included, that had we come to power in 1974 and devised our own Price Code, we should have devised a rather better instrument than the one we were left with by the Conservatives when they went out of office. Every change


in the Price Code—from October 1974 I have participated, or at least sat through, or endured, every one of these debates—has been beneficial, a positive change away from what the Conservatives left us with.
While my hon. Friend the Member for Bristol, North-West may have doubts about where some of the money has gone, the fact is that there is no room for complaint from the Conservative Benches. Every change has been positive and helpful. The Conservatives invented this system. Either it works or it does not. Either it is strict and damaging or it has no effect on prices. It cannot be both, no matter what excuses may be scraped up for the differences between different companies.
However, my hon. Friend the Member for Bristol, North-West cannot have it both ways, either. He cannot deny that wage levels have some impact on prices. Therefore, the effect of wage levels on costs must be reflected in some way through the code. I share my hon. Friend's doubts about the uneven application. This is the area in which I have the most concern.
It would be churlish to let this debate pass without acknowledging that the changes in relief for the retail sector on buildings, warehouses and so on, for which we have argued for so long and which are, at last, included, are very much welcomed. I will not say that they are overdue, but on behalf of the cooperative movement in particular and the distributive sector in general I say that we should not let the evening pass without saying that we are pleased that the changes are there.

11.7 p.m.

Mr. Giles Shaw: I do not know whether it would cause embarrassment either on the Conservative Front Bench or to the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) if I were to allow myself the rare privilege of saying that I am disappointed that we are all here. I am disappointed that we are having to debate the continuation of a codified price control structure which I suspect everyone would willingly see abolished if that would make a significant contribution to the generation of more jobs, and more investment and lead to an improvement in the economy.
Although the hon. Member for Newcastle upon Tyne, East rightly said that we were dealing with the legacy of a previous economic policy of a previous Conservative Government, there are those of us—I think I take him with me on this—who are equally concerned that what has been carried forward from the past in terms of codified control on prices should now still be continued. If we had our time again, I suspect that most Labour Members would disagree fundamentally with the proposition that there should be separate codified systems for prices and wages.
We know that the present position is that the Labour Party would in no sense wish to have a codified wages policy. The only reason we have a codified prices control is that it was a concomitant of those twin policies introduced at that time. The discussion of a codified prices policy now as a separate instrument of economic management when, by all accounts, a codified wages policy has been abandoned is at the guts of the reason why the argument still persists, even as late as November 1977, at five minutes past eleven at night.
This order is, I trust—and I think that the Secretary of State has given us some encouragement here—the last of the orders under this Act which will be continuing some of the provisions of the original prices policy. We all agree that it is an improvement on its predecessor, just as its predecessor was an improvement on the one before that. Every moment has been gradually argued out to demonstrate to Government that it is best to allow the pricing sector to operate according to cost and not according to political decisions. What we are really talking about is political decision-making intervening in the argument whether costs should be reflected in prices.
I know of no other argument in the formula. If costs are not to be reflected in prices something has to intervene—either taxation to recover the cost of subsidising, if subsidy is the order of the day, or unemployment benefit paid to those put out of work if employers cannot run their businesses, or some kind of payment to the consumers so that they may be given additional supplements to income to afford natural prices.
But in the general equation no one can escape the fact that the basic costs of


production have to be reflected in the basis price offered to the consumer. We have the one sector of margin control with which this code still deals, and here we have to say that, despite the modest movement that the right hon. Gentleman has made, he has remained steady on a 12½ per cent. return on capital but has moved half a percentage point from 2½ to 3 per cent. on turnover.
Do the Government seriously believe that that is an adequate change, bearing in mind the historic changes on which these costs have been calculated? We are talking here of a five-year period of inflation—in double figures for the last three and a half years. We are saying that we agree that it is desirable to move from 2½ per cent. to 3 per cent. on turnover. That is peanuts in the generality of seeking to get the economy moving and a gross travesty of economic management. If we really want to believe the Government's attempt to generate more jobs and investment, a move from 2½ per cent. to 3 per cent. on turnover is pathetic.
The hon. Member for Newcastle upon Tyne, East has, quite rightly, drawn attention to the benefit to the distributive trade in considering whether the code makes a sufficient improvement in other things, such as investment allowances. But what has happened in the case of commercial vehicles, for example? As far as I can see, they are not treated like other forms of in vestment generally used by most manufacturing and distributive companies, and are not allowed the preferential treatment given to other forms of investment.
I question whether the effect will be beneficial to employment. We spent a long time in Committee on the Price Commission Bill, when there was an argument for saying that the Price Code could be used to help industry to take on more people. One of the anxieties expressed, certainly by the hon. Member for Bristol, North-West (Mr. Thomas) has been about the possibly damaging effect of using the code as a vehicle for keeping wages low in industries which could well increase their wage offers.
This is neither the time nor the opportunity to discuss wages policy, but one can say that if there is agreement that an increase in profit margin allows an increase in employment—I suspect that

there is a clear relationship between increased profits and increased employment—one cannot view the present situation other than as one of discouraging employment. There are specific allowances on plant and machinery; there are not specific allowances for increasing employment.
Labour costs are a large proportion of any manufacturer's costs. It could be argued that the general effect of the code is to make marginal changes in areas where, by and large, industry has been asking for changes. Yet, as a positive gesture, these changes seem to me to have no benefit whatever.
There is plenty of evidence from previous Price Commission reports to show that the competitive nature of most industries, certainly the food industry, is such that prices would not have risen by as much as they have, given a general free market in prices. I am clear that, where a codified system exists, it is incumbent on any management to optimise every target under the code, and it is not surprising, therefore, that that is resulting in a general upward movement of prices within the limits of what is allowed.

Mr. Ron Thomas: I cannot see the logic of the hon. Gentleman's argument. The fact that under the code, firms can, get price increases does not stop the market mechanism from operating. The firm which wants to remain competitive does not increase its prices—it does not go to the code. According to the hon. Gentleman's philosophy, British industry is dominated by a small number of oligopolies which determine prices.

Mr. Shaw: We can talk about oligopoly as regards average wages and, indeed, wage negotiations. The point is that when a codified system provides that one is allowed to increase prices by a certain amount in relation to costs, everybody who incurs those costs will seek to pass them on. I suggest to the hon. Member for Bristol, North-West and, indeed, to the keen and erudite Member for Newcastle upon Tyne, East that when we had a discussion about gas prices recently there was very clear evidence of that—that even though if the market had been allowed to operate the price of gas would not have been increased, the Government ensured that the price


was increased. This thinking operates throughout the sector where prices are controlled by codes.

Mr. Mike Thomas: The hon. Gentleman degenerates from buffoonery to nonsense. The fact is that if the forces of competition are operating—I presume that the hon. Gentleman shares the view of his right hon. and hon. Friends that in some magical way they are—this process of allowable costs and inevitable increase will happen. If it happens, that in itself is a case for control. As regards the price of gas, gas in itself is a monopoly. Even taken within the broad sector of fuel prices generally, increasing the price of gas to what the market would bear at present would probably double or treble it. The hon. Gentleman is talking nonsense.

Mr. Shaw: The hon. Gentleman must recognise that if the Gas Corporation did not wish to increase the price of gas or argue that it was necessary for it to do so and was perfectly happy with the return it received on the product, the consumer, in whom the hon. Gentleman always expresses a substantial interest, was very content.
When it comes to the question of pricing in the private sector, under a codified system the question that all managers, manufacturers and those who set prices must determine is what they can operate under the code. That determines the ceiling on what is permissible. The Government in their management of pricing have encouraged the belief that what is important is to ensure that within the code the optimum is obtained. That is the way in which pricing has been conducted in the past three or four years.
That is one of the big differences between having a codified system and having a non-codified system. There are systems in the free market economy which will allow other factors to operate. With a modified system one is bound to have the optimum return under the code. That is the situation at the moment.

Mr. Mike Thomas: Is the hon. Gentleman aware of what a shameful commentary that is upon the behaviour of British industry? If what he says is true, industry pays no regard to competition—there is not any genuine competition.

Firms rig their prices in concert. They all increase their prices whenever they have the least excuse for doing so. Is this what he is really saying to us? I do not believe it.

Mr. Shaw: The hon. Gentleman knows full well, because he has raised this point on many occasions, just why the prices in various sectors of British industry rise in such a way. He knows full well—the Price Code has provided for it—that three-months by three-months costs can be reviewed and applications made. If he thinks that sitting round a board room table a director of a firm can justify the attitude "We will ignore this sector's next increase. We will let the next six months or nine months pass without putting in a price application.", he is deceiving himself and the House. The pressures on industry are such that it must operate as I have said, given the generation of inflation over the past three years, which has made nonsense of profit forecasting. The hon. Gentleman knows full well that when inflation is running at 12 per cent., 13 per cent., 14 per cent. or 15 per cent. per annum, one must keep moving in terms of prices if one is to survive.
I turn from that substantial interpolation to the question of the Price Commission Act and the code which is operating. I should like to ask the Under Secretary whether he has evidence that under the new Act the investigatory procedure is working satisfactorily. There is some ground for believing that the deterrent involved in the potential freezing of prices at present when an investigation is conducted is such that it will actually prevent price increases from being applied for and, consequently, that firms will put themselves at risk rather than incur the 28-day period of freeze.
Before hon. Members say that they have nothing to fear if their price is correct, I suggest to the Minister that the main concern companies will have is the fact that they will have their prices frozen in any event. They will be able to recover, possibly up to 100 per cent. That is allowed for in the Bill. But the fact that prices will be frozen for a period will be a deterrent against making applications. If that is so, if could seriously put smaller companies at risk, if not larger ones.
In discussing what I hope is a final amendment to the Counter-Inflation Act


and Price Code, I think it right that we should debate the order very late at night. It is a sorry measure in a sorry history of price control, and the sooner we bury it, the better we shall all be.

11.21 p.m.

Mr. Nicholas Ridley: I apologise for missing the beginning of the debate: I had to be elsewhere. However, I cannot resist making a very short speech in fond farewell to this Price Code, if it is indeed the last Price Code.
During the debate a large number of hon. Members have said that other hon. Members could not have it both ways, whatever that means. I remember the Counter-Inflation Act, under which this code is made, when hon. Members or their predecessors, myself, and my hon. Friend the Member for Oswestry (Mr. Biffen) opposed it. Those hon. Members are having it both ways themselves. They are now all in favour of price control, but they were not when in opposition. It is a strange thing about wage and price controls—all Governments are in favour of them and no Oppositions.
I must claim exception for myself because, unlike my hon. Friend the Member for Pudsey (Mr. Shaw), I actually believe that prices in the economy are controlled by competition. Labour Members laugh, but when these Draconian powers came into force in the first Price Code in 1973–74, every price went up—with one exception. The only price that fell dramatically was the price of houses, and that was the only price outside the Price Code. That is a point for hon. Members to ponder.
Having studied the order before us I should like to ask the Minister where publicity about a notification will be laid against the firm that makes it. I can see no such mention in this Statutory Instrument. I ask that question because in an article inThe Times last Saturday Mr. Charles Williams, Chairman of the Price Commission, said:
The commission disapproves of notification being aired in public. Who can say in the future whether publicity will modify the commission's attitude to a notification?".
Where is the legal justification for Mr. Williams to say that? Is he really saying that he alone is allowed to approve or disapprove of what firms do or do not do? He is the servant of this House to

administer the legislation. He is not a person who has discretion about of whom he approves or disapproves. Furthermore, are we really allowing a bureaucrat to say who may engage in publicity and who may not?
I understood that free speech was still available in this country, even to firms which put in price increase notifications. Upon what does Mr. Williams base his authority for this outrageous statement?

Mr. J. W. Rooker: I hope the hon. Gentleman will put the record straight for posterity. Mr. Charles Williams is not the servant of this House. He is not responsible to this House. He was not appointed by this House. His appointment was not approved by this House. This needs to be laid on the line. Mr. Williams is the appointee of my right hon. Friend, who sought no one's approval. He is not required to seek anyone's approval let alone the approval of this House, to appoint Mr. Charles Williams. Whether one agrees or disagrees, the fact is that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) uttered a false notion about the accountability of Mr. Charles Williams to this House.

Mr. Ridley: Absolutely not. I am happy to send for Mr. Williams to come before my Sub-Committee of the Expenditure Committee. I should be happy if the members of the Public Accounts Committee required his attendance to explain any matter. He is accountable to this House. The idea that the Government have the power to appoint and dismiss these people, irrespective of the wishes of the House, is wrong.

Mr. Rooker: Try sacking him.

Mr. Ridley: In view of what Mr. Williams said inThe Times last Saturday, I shall have a jolly good try.

11.26 p.m.

Mr. Michael Neubert: It is a sad commentary on the lack of improvement in the human condition that we are debating yet another prices order late at night. The original Price Code has been changed, modified and otherwise amended so often that it baffles comprehension. The previous Secretary of State retired defeated on this issue, and yet we still consider these orders time after time.
This time the order is the subject of stricture from the Joint Committee on Statutory Instruments. It would be helpful for the House to know exactly what the Committee said. It stated:
The Committee consider that the multiplicity of these powers and of the amendments to earlier Acts makes it difficult to determine whether this order … is in fact within the statutory powers under which it purports to be made. They consider that there is a need for the consolidation of prices legislation.
I shall attempt to paraphrase what the Committee says. In plain language it seems to mean that legislation has been altered so many times that it is now of bewildering complexity. It does not understand it and nor does anyone else. The Secretary of State may not have the powers that he thinks he has and he may be breaking the law without knowing it, yet the House appears to be ready to pass the order without challenge.
Despite the Committee's view, the Secretary of State asks us to argue not on the generalities but on the merits of the order itself. If that is what he wants, he will have to persuade the Lord President of the Council that 90 minutes is not sufficient time in which to discuss obscure technicalities and that he will have to allow a full day's debate in future.

Mr. Mike Thomas: Is the hon. Member for Romford (Mr. Neubert) saying that these changes are so crippling that he will not vote against them?

Mr. Neubert: Our attitude to the Price Code is clear. We have a simple solution—scrap the code now.
My remarks must be considerably truncated in order to allow the Under-Secretary of State time to sum up the debate. This is an order of complexity which the Secretary of State claims to understand. If put to the test, I doubt whether he could prove that he understands it, but I do not propose to do that tonight.
We are opposed to the order not only because of its complexity but because we believe that the effect of the Price Code has been insignificant. When one considers the background of rapid inflation, how can one claim that stringent price control has been anything other than insignificant? By next spring it is likely that prices will have doubled. The notion of stringent price control over the last

four years will then appear laughable. Buttonhole the average person in the street and he will frankly greet one with downright disbelief on that score.
It does not carry much conviction with the Tribune Members below the Gangway, either. Even its most respected apologist, the recently retired Chairman of the Price Commission, Sir Arthur Cockfield—this was his dedicated work for four years—could claim only that
looking at all the evidence available, the best estimate we can make is that, at the peak, price control probably reduced prices by about 3 or 4 per cent. compared with what they otherwise would have been.
Against a background of the peak of inflation at 26·9 per cent. in August 1975, the fact that in that calendar year inflation ran at 25 per cent. and that even now it is still 14 per cent., with the result that the real rate of inflation—because there were direct consumer subsidies which would have added a few points—was even higher, we can see that the credibility of stringent price control in these circumstances is something less than negligible.
That is not to say that it has not had some effect on prices. It has, but in other areas it has been restrictive. It is a failure of Labour Members that they have to see everything in straightforward terms. They cannot conceive of different circumstances affecting different companies in different ways. They cannot see that one rigid set of rules will bear differently on one company from another, that those companies that go for growth will find it oppressive and that those finding the market slack will not be affected by it.
They completely fail to understand these factors. We would perhaps welcome the slight relief that such a reduction in prices has managed to achieve as something to set against the ravages of inflation under this Government but for the great damage done to industrial productivity and the prospects for employment.
My hon. Friend the Member for Pudsey (Mr. Shaw) made one point very well and I should like to support him by quoting two cases of the lack of profitability in British industry. First, the Government's White Paper "The Attack on Inflation The Second Year" states:
During the 1960s, the rate of return, after taking account of the need to replace fixed investment and stocks, was typically over 10


per cent. By 1974 it was down to 2·2 per crent. This has contributed to the recent slump in new productive investment and consequent loss of jobs. The downward trend in profitability must be reversed.
The Bank of England Quarterly Bulletin for June of this year takes the story on. It states
By past standards, the real pre-tax rate of return was already very low in 1974, at only 41 per cent; but it fell even further in 1975, to 3½ per cent., and widespread expectations of a recovery in 1976 were not fulfilled … But for the introduction of stock relief in 1974, post-tax seal rates of return in the last three years would have been virtually nil.
For many companies there would have been a minus factor.
It has been a deception of the public to suggest that by reducing prices to this modest degree, with levels of profitability of that order, anything significant has been done to remove the source of inflation. British industry needs profits as a stimulant to investment, and investment is the essential key to jobs. It has taken all of three or four years for Labour Members to discover this. The result is record levels of unemployment, no doubt running for a record period of time.
Pay policy is now limited only to the 12-month rule. The Government devised their own voluntary guidelines and, although they started with the idea that pay increases should be of the order of 10 per cent., they failed to make it clear that that was the aggregate and that basic increases should be 5 or 6 per cent. Ten per cent. has become at best the average and at worst the minimum. Tonight the CBI reports that of 700,000 who have had wage increases, no fewer than 112,000 were within the 10 per cent. figure. Hesitant at first, the Government are now ham-fistedly trying to recover the position.
For all those reasons, we should like to see an end to the Price Code. I have a word of warning for the House and for my hon. Friends. It is that this need not be the end of price control as we know it in this form. Although the order lasts only until 31st July, there is nothing to stop this Government from coming forward at that time with legislation to renew the Price Code in this form. [HON. ME MBE RS: "Where will you be?"] We may well be here. because the Government lack the courage to face the electorate. We are told "Back

us or sack us", but we are not given any chance to choose.
I hope that, if he does nothing else, the Minister will make a clear, unequivocal and forthright statement that price control in this form of the bureaucratic Price Code will be abandoned altogether next August. Better still, let us have the chance at a General Election to return a Conservative Government who will restore the damage of the last four years.

11.36 p.m.

The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): I hope that right hon. and hon. Members opposite will not think it an impertinence of me to suggest that before they launch into a debate of this kind they ought to clear their lines with each other in order to determine how long they think the Government will go on. Perhaps I may quote my right hon. Friend who said on a famous occasion "I know what is going on; we are going on".
The hon. Lady the Member for Gloucester (Mrs. Oppenheim) drew attention to the sense ofdéjà vu which these debates on the Price Code stimulated in her. One of the reasons is that she pulls out the speech she made on the previous occasion and refurbishes it, regardless of how circumstances have changed since the last occasion. It is rather bizarre that she peddled the line that she has used in every other debate about the burdens that industry has faced under the Price Code without mentioning that the Price Code which we are discussing tonight is markedly different from previous Prices Codes in that this is dismantling cost-related controls. There was not a word from her about that.
My hon. Friends have made merry with her internal contradictions about the burdensome effects of the Price Code and its negligible effect on prices, as she sees it. That was unsupported by any evidence as to the negligible effect on prices or the burdensome effect on companies, save that she cited the evidence of Mr. Halstead of Beechams at the CBI Conference. He produced figures relating not to the Price Code before us but to that introduced by the hon. Lady's right hon. Friends when they were the Government.
The hon. Lady gave figures relating to the decline in profitability over the period


up to 1976. The order is part of a wider prices policy which the House debated at some length during the summer, a policy which the hon. Lady wished to dismantle but which the House in its wisdom decided to enact.
The order is admittedly a transitional measure, a measure intended to run only until July of this forthcoming year. The House will not be able to discuss a new code as the Price Commission Act does not empower us to bring forward such a code again.
My hon. Friend the Member for Bristol, North-West (Mr. Thomas) raised one of the specific questions of the debate—whether this Price Code could be used to stop wage increases which fell outside the wage guideline of 10 per cent. I can give the categorical answer that it cannot. The only part of the pay sanction which can be backed by the provisions of this code is that part which is contained in the annex to the White Paper published in July which relates to the 12-month rule, as my right hon. Friend has described. It is not open to the Price Commission to act in the way that my hon. Friend feared.
The hon. Member for Ashfield (Mr. Smith) spoke particularly of the effect of the new code on distribution. He did not draw attention—perhaps I may briefly do so in passing—to the modifications of the code, particularly the improvement in the safeguard for net profit margins to allow distributors to set gross margins up to 115 per cent of base level margins in order to obtain 85 per cent of net profit margin reference levels. There has also been a modification in the definition of small distributors exempted from the 10 per cent cut in gross margins. Therefore, the distribution sector has not been excluded from our consideration, as the hon. Gentleman suggested.
My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) was quite right to emphasise that in any prices policy one cannot leave out of account consideration of the effect of wages upon wage costs. However, I must say to the hon. Member for Pudsey (Mr. Shaw) that he enunciated a philosophy of industry which is, perhaps, at root one of the troubles with British industry today, when

he suggested that the pricing policy should be operated according to costs. I think that I have his words as he said them. He said that basic costs of production have to be reflected in price increases.
That may be the hon. Gentleman's philosophy, but it is certainly not the philosophy that inspires the present Government, who appear both to be more wedded to competition policy than the Conservative Party and to believe that it is possible and, indeed, desirable that improvements in efficiency should lead to price savings to be passed on to the consumer. The Government also believe that it must be a purpose of prices policy, as of competition policy, to ensure that there is incentive to achieve such productivity gains and efficiency gains, so that the rather harmful dictum to which the hon. Gentleman gave pronouncement, that basic costs of production must be reflected in increased prices, no longer characterises the way in which British industry operates. We shall certainly lose out in the international competition which we as a country face if that kind of philosophy is to be embodied in British industrial practice.
It is not for me to answer the points made by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) about the remarks of the Chairman of the Price Commission. They are for him and not for me.
The hon. Member for Romford (Mr. Neubert) spoke of the effect of the Price Code being different on different companies. I only wish that that view had been so clearly expressed during our debates on the Price Commission Bill, because it was very much with that in mind that the present Government brought forward that Bill. It was to enable our prices policy to be very selective and more designed to hit companies which were unreasonably raising prices and unreasonably acting against consumers' interests. It is a policy more flexible and more effective and, I believe, for that reason, one that is here to stay.

Question put and agreed to.

Resolved,
That the Counter-Inflation (Price Code) Order 1977, a copy of which was laid before this House on 28th July, in the last Session of Parliament, be approved.

ROAD CONSTRUCTION (NORTH WALES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]

11.45 p.m.

Sir Anthony Meyer: The Under-Secretary does not need me to tell him of the terrifying level of unemployment in North Wales, particularly in the county of Clwyd, nor of the awful uncertainty hanging over the future of those industries, particularly steel and aircraft construction, which are still the largest employers of labour in the area.
If Clwyd is to get the extra jobs which are so desperately needed, one thing above all is necessary—the certain prospect of a very early improvement of the trunk roads that connect the area with neighbouring industrial areas in England. I do not believe that there is any other single factor which could do more to improve job prospects than the firm assurance of an early date for the completion of dual tracking of trunk roads within the area, linking the area to the English motorway system, and most notably the notorious A55.
What I shall suggest tonight in a speech that will be purely constructive, I hope helpful, and certainly free of any party politics, is that the process of completing this essential dual tracking could be very greatly speeded up. In speeding up the process the cost to public funds could be cut, the worry and anxiety which are necessarily caused to residents in the vicinity of new road construction could be reduced, and the damage to agricultural production and interference with the farmer in his work could be diminished. All these advantages could be secured if only two principles were accepted by the public authorities responsible for road planning and construction.
The first is a substantial lowering of specifications for the purpose-built dual carriageway roads. The second is that the Ministry, having announced its line for a new road, should be very much more resolute not only in sticking to that line but in maintaining its declared dates for the commencement of work than has been customary in the past.
Before I elaborate these ideas I introduce a mildly critical note. I have had a

complaint from a firm of contractors, actually within the Minister's constituency—he knows the firm well—that the Welsh Office, without any advance warning to the contractors who usually tender for road works in North Wales, has adopted the practice of inviting tenders only in the columns of the journal officiel of the European Community. In doing so it would seem that the Welsh Office is being more European than the Commission itself, for there appears to be no EEC prohibition of advertising these contracts in local papers in the area where the work is to be carried out.
I think that contractors are now probably all aware of the need to keep a close watch on the columns of the journal officiel, but I must ask the Minister for an assurance that he has taken steps to make all those contractors who usually tender for road works in Wales aware of the change of practice. With unemployment in the construction industry at present levels, we cannot risk losing work on road construction projects. Certainly the firm concerned has a strong sense of grievance that it was not given the proper opportunity to tender and that work has been lost that was badly needed. Is it not really possible, even at this late hour, to give it a chance to put in its bid?
I come now to the cumbrous and lengthy procedure for announcing the line of a new road, inviting objections to it, revising the line, hearing objections to the new line, modifying it again and so on. Of course everyone who may be affected by a new road should have the opportunity of objecting, and the Department should be ready to be flexible in making small variations of line in order to diminish the inconvenience or distress of individual complainants.
It is all too easy to lose sight of the fact that if there is a major change in the line originally announced, or even if it is thought that there may be a major change, the evils of planning blight—people unable to sell their homes, not knowing whether to improve them—and the worry and uncertainty will affect not only those along the original line, but all those along any of possibly a large number of alternative routes. I believe that the Welsh Office, as the Department responsible for trunk road construction in Wales,


needs to look carefully at its present practices in three areas.
It should be quite sure that in choosing its preferred route for a new road it is reducing to an absolute minimum the loss and distress which will be caused to those householders and farmers along the route. Secondly, once the route has been published the Department should show itself completely flexible in making small changes so as to meet the real needs and anxieties of those directly affected. But, thirdly, the Department should be pretty resolute—a good deal more resolute than the Department has been in England—in sticking to the general line it announced at first. In this matter firmness may well be the kindest course.
The principal matter which I want to raise with the Minister tonight is a more fundamental one. I believe that the Welsh Office, like the Department of Transport in England, is using much too high a standard in the construction of new roads. The most conspicuous example of this is the superb and almost unused carriageway from the M4 near Newport to Monmouth, the A449. I am sure that the dual carriageways of the A55, when they are completed, will be much busier than that, and indeed that they should have had a higher priority than the A499. But I am equally sure that there is no need whatever to build the A55 to so high a standard.
From Written Questions which I put to the Minister last week it emerged that the cost of dualling the remaining 48 miles of the A55 from the Welsh border to Bangor is to be £180 million. Admittedly, £120 million of this sum is for the 17 miles of the Col-Con section—Colwyn Bay to Conway—and it is hard to see how the cost of this, the most essential part of the route, can be kept down. But the remaining 32 miles is to cost £60 million and I cannot believe that there is no scope for reduction.
I am sure that on this road it would be possible to accept gradients substantially steeper than the 1:25 which is the normally permitted maximum, with curves somewhat sharper than the 510-metre radius which is the present limit. I see no need whatever for the elaborate interchanges, with roundabouts and slip roads which are provided for at the Lloc end of the projected Holywell bypass,

which will take two fields and part of a third field out of agricultural production. Simple feeder lanes, if necessary with traffic lights, would be far less expensive to build, would take scarcely any agricultural land and would be quite adequate for the traffic.
Surely the object is not to enable traffic to move at a steady 70 m.p.h. from the border to Bangor, but to avoid any traffic jams or having to travel long distances behind very slow vehicles. I cannot believe that anybody would complain if he could rely on always being able to do the journey at an average 45 m.p.h., and on long stretches of the road it should be possible to achieve this by building a new two-lane road alongside the existing single carriageway.
It should also surely be possible to reduce the width of the outside grass verges, thereby taking less land from farmers. If steeper gradients are acceptable, as I think they should be, there will be no need for the hugely deep cuttings and embankments which eat up such a vast quantity of agricultural land. After all, we cannot eat even the best roads, or grow anything worth eating on them.
It must be a nice change for the Minister to listen to a Member asking him to spend less money, even if I do not want him to spend that less money a lot sooner. But if he is to save large sums by accepting lower standards, on the other side of the picture he should be prepared to be very much more generous in the provision of underpasses for cattle, and cattle and pedestrian bridges.
As I understand it, that kind of interchange which I have been describing as totally unnecessary costs most of £1 million whereas a cattle bridge costs a mere £80,000, and a pedestrian bridge a mere £50,000.
Where the new road departs significantly from the line of the old one, as with the Holywell bypass, it will cut communities at places like Brynford, in half, and will make it impossible for many farmers to run their farms, cut in two, as a viable unit. Cattle and pedestrian bridges can do a good deal to reduce the inconvenience and loss. I hope that the Department will be generous in the provision of them.
I hope that the Minister will not get me wrong. I believe that we could make


do with cheaper roads, but, whether we build them to the present unnecessarily high standards or to the somewhat lower ones that I am suggesting, we need them very soon. We must also ensure that in building them we reduce to an absolute minimum the loss and distress of those who live along the route and who have to suffer so that the rest of the community may benefit.
I look forward with interest to the Minister's reply. I hope that he will not content himself with a defence of his Department's policy, for I have not been attacking that policy tonight. I hope that, on the contrary, he will undertake to give careful consideration to what I have said, and to ask his officials to look carefully at the figures I have used and see whether there is not something in what I have been saying.

11.55 p.m.

The Under-Secretary of State for Wales (Mr. Barry Jones): The hon. Member for Flint, West (Sir A. Meyer) began on a gloomy note. I believe that industrial Deeside can weather the economic storm. There may be steelworks and aeroplane factories with far bigger problems than those in my area.
I am grateful to the hon. Gentleman for raising the subject of trunk road planning and construction procedure. Like him, I am deeply concerned that the planning of our trunk roads in North Wales and our construction procedures take the fullest account of the needs of our community and of the interests of individual members of the public, both as taxpayers and as people who might be closely affected by what is done.
I refer first to the needs of the community. Certainly, for the most pressing economic reasons, North Wales must be furnished with a modern system of roads giving rapid access to the centres of Merseyside, Manchester, and the Midlands. I have no intention of setting as a target for the development of the infrastructure of North Wales a standard that does not put us in effective competition with the remainder of Great Britain and of the EEC. This means plugging in to the motorway system, as well as improving the network of trunk, principal and minor roads.
Let me refer at the outset to the gateways of North Wales. The recent decision by my right hon. Friend the Secretary of

State for Transport to go ahead with the extension of the M56 from Hapsford to Lea-by-Backford and to give a 100 per cent. grant to Cheshire County Council for the extension of the M531 southwards from its existing terminal to the new M56 interchange at Stoak is vital. Tenders have already been invited for the stretch of the M56 from Hapsford to Stoak and should, I understand, be invited in early 1979 for the remainder of the M56 extension from Stoak to Lea-by-Backford. Tenders are due to be invited in the spring of next year for the first stage of the M531 extension.
This radically changes for the better the approaches to North Wales. The decision to spend £12 million was taken by the Department of Transport in close collaboration with the Welsh Office as an influential partner.
I am also happy to announce tonight another piece of construction work which is critical to the creation of a modern access to North-East Wales. My right hon. and learned Friend the Secretary of State for Wales has now accepted the tender from Fairclough Civil Engineering Limited for the construction of the new grade-separated interchange at the junction of the A494 and A548 at Queens-ferry. The scheme, which will cost about £2·2 million, will involve constructing a new roundabout to the east of Queens-ferry and a flyover to carry the trunk road traffic over it. Construction is expected to start shortly and should take about two years to complete. I am confident that the approaches to Wales will continue to be improved.
I come now to the matter of the A55, which I know the hon. Gentleman watches carefully. These decisions are only part of a series which the people of North Wales can expect as we press ahead with improvements, particularly on the High Road, the A55. from Chester to Bangor, where about £180 million is to be spent. My right hon. and learned Friend hopes to move as soon as possible to an important announcement about the Col-Con scheme. I also want to mention the £13 million scheme for a bypass of Hawarden, on which a public inquiry has just been held. A possible starting date there is mid-1980.
I lose no opportunity to reaffirm our commitment to carry through planned improvements along the whole length of


the A55. As a North Walian, I am glad to see the Department using such considerable resources to deal with the problems of roads in North Wales particularly the A55.
I now want to say a word about the A483 and the A5. I cannot talk in detail about all the trunk roads in North Wales this evening, but I want to mention two more of them, starting wih the A483 between Wrexham and Chester. The preferred route has already been announced. Clwyd County Council has suggested some alterations before the draft orders are published and there are some matters of delay and extra cost, but we wish to get on speedily with what has been proposed. Schemes for the improvement south of Wrexham are already included in the preparation pool with work expected to start on the Ruabon bypass at a cost of £6.5 million in late 1981, and that on the Chirk and Newbridge bypasses after 1983.
I must also make it clear that there is a positive improvement plan for the A5. We have a series of schemes although necessarily more modest than those on the A55. But in fact on the lengths of the A5 across Clwyd and Gwynedd, excluding the major schemes at Britannia Bridge and the Bangor and Llanfair PG by-passes, which will cost £28 million, we have seven smaller schemes due to start before the end of 1979 with a total cost of almost £2 million. Orders will be published this week for the Bangor bypass which is scheduled to be started early in 1980 at a cost of £14½ million.
So far I have talked about sensible planning for the needs of the community and in particular for its economic wellbeing. Industrial regeneration is of the highest importance and we must give the young people of the area a better future to look forward to. However the hon. Gentleman has drawn attention to the need for economies in the use of resources in land, money and materials as well as the need to minimise disruptions both physical and psychological that trunk road development can bring to members of the public. I have in mind members of the farming fraternity. I must accept these points in principle. I note the hon. Gentleman's suggestions, both general and specific, and undertake to reflect upon them.
I now want to respond to some of the points that have been made. The preparation of trunk road schemes is a complicated lengthy process which can involve strategic, planning, legal, environmental, social and economic problems. The processes, whether statutory or non-statutory, are aimed at reconciling the needs of road users with those of the people living in close proximity. Such a balance could not be struck if at an early stage in the process the Secretary of State was committed to one particular line from which he could not deviate. There are occasions, following consultations with the public, when a perhaps better route than the one we originally proposed has been put forward. We need a measure of flexibility before we can finally arrive at a preferred route.
Even after a line has been published we are always prepared to consider any worthwhile ideas that are put forward. For example, an alternative for the Holy-well bypass which has been proposed by the Delyn Borough Council is at present being evaluated. It is of direct interest to the hon. Member that as a result of further trial boreholes made since the publication of orders and investigation into the slip on the A55 at the eastern end of the scheme, the Department now considers it necessary to carry out further detailed soil investigations to determine stability and elasticity. That is of direct interest to the hon. Gentleman and me. These investigations will have to be completed and a review undertaken of the Department's proposal and the other alternative routes put forward by objectors, including the Delyn Borough Council, at the eastern end of the scheme. In these circumstances it is likely to be well into 1978 before a public inquiry is arranged. This is an instance of the Department indicating what we have always said, namely, that we will not railroad people.
It is the normal practice of the Welsh Office to adopt selective or restricted tendering procedures in which contractors are selected from a standing list before being invited to tender for highway works. This is in line with the practice of Government Departments generally and a practice which is largely followed by local authorities. This system ensures that tenders are received only from those firms that have the necessary financial standing and expertise to carry out a


particular job satisfactorily and at a competitive price. It also ensures that large numbers of tenders are not submitted, thus relieving many contractors of the effort and cost of tendering for contracts which they have little chance of securing.
Since the United Kingdom became a full member of the EEC the selective tendering procedures have had to take account of the Community's Directive No. 71/305, the effect of which is to require the Department to notify the official journal of the EEC of impending contracts and to select the firms to be invited to tender only from those firms that have indicated their interest subsequent to the appearance of the item in the official journal. The hon. Gentleman strove hard to take this nation into the EEC and he probably knows as much about this matter as I do.
I turn to the hon. Gentleman's remarks about Messrs. F. G. Whitley and Sons Ltd. A total of 27 firms indicated that they wished to tender for the A55 East of Abergele scheme. Whitley was not among them. Under the EEC rules, therefore, the Department was not able to extend to them an invitation to tender. The EEC common procedures for advertising and awarding public sector contracts have been in operation for more than four years and I think it safe to assume that contractors should be fully aware of their implications. Certainly these procedures received wide publicity in the United Kingdom technical Press, and the Federation of Civil Engineering Contractors, of which Whitley is a member, was aware of the change.
My Department has had no other complaint that the publicity afforded to the new procedures has been inadequate. However, I can assure the hon. Gentleman that the local Press, as well as the technical Press, is informed when scheme; are notified to the EEC journal. I cannot re-open the tender list for the A55 East of Abergele scheme, but the hon. Gentleman will be pleased to know I am sure that this firm has recently been successful in gaining a £109,000 contract for a scheme in Gwynedd at Waterloo Bridge and has been invited to tender for two more schemes in North Wales. I can also assure the hon. Gentleman and Whitley's that the interests of the firm have been and will continue to be borne in

mind in the future when further trunk road improvements in North Wales reach the tender stage.
We approach the design of any scheme with an eye to relating the size of investment to the probable use of the road, savings made in fuel, in vehicle-operating costs, travelling times and accidents, as well as the environmental benefits likely to accrue elsewhere. In many respects pressures are put on the Department not to reduce the size of our planned schemes but more often to increase the design so as to raise the capacity or status of the roads. Thus I accept what the hon. Gentleman has said about making better use of existing resources and investment by increasing widths of existing roads or by building new carriageways alongside the existing ones to produce dual carriageways. I suggest that the hon. Gentleman might want to turn his missionary zeal to Clwyd County Council in some instances, but that may be a subject for other debates. However, that development is not always possible. One often gets ribbon-type development or even towns like Holywell alongside existing roads and in order to increase their width or to build alongside them one would have either to demolish great numbers of proporties or place roads so close to people's homes as to make them uninhabitable.
Holywell is a good example. It is a town for which I have much affection and of which the hon. Gentleman has considerable knowledge. This is just not on. We do improve existing roads wherever we can, but there are many sections of existing road with quite unacceptable alignments. The condition of the road from Holywell to the seaside resorts is a good example. It is not always possible either to meet the needs the forecast levels of traffic and the aspirations of the community for economic development without going beyond the modest techniques which the hon. Gentleman has outlined.
The hon Gentleman mentioned economical land purchase and prices. We are economical in land purchase. We buy only enough to enable the roads to be built to the standard designed. Sometimes we may purchase more than is ultimately needed where this is in the interests of the owner or of the good management of the land itself. We are also obliged on occasions to buy more


than we need under the blight provisions. But I can assure the hon Gentleman that any land surplus to requirements is sold off as soon as possible after the scheme has been completed.
I thank the hon. Gentleman for raising these subjects in an Adjournment debate. The time was ripe for a brief debate and

an exploration of views—of the Department's and of the hon. Gentleman's. I hope that in some small way I have effectively responded to the issues that have been raised.

Question put and agreed to.

Adjourned accordingly at thirteen minutes past Twelve o'clock.